<PAGE>

                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

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


                                   FORM 10-KSB

                  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934




For the Fiscal Year ended October 31, 2003         Commission File No. 000-49865
------------------------------------------         -----------------------------



                       TriMedia Entertainment Group, Inc.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)


                  DELAWARE                              14-1854107
      -------------------------------         ---------------------------------
      (State or other jurisdiction of         (IRS Employer Identification No.)
       incorporation or organization)

                                101 Charles Drive
                          Bryn Mawr, Pennsylvania 19010
             ------------------------------------------------------
               (Address of principal executive offices, Zip Code)


                                 (610) 520-3050
                ------------------------------------------------
                (Issuer's Telephone Number, including Area Code)


        Section registered under Section 12(b) of the Exchange Act: None.

<TABLE>
<S>                                                  <C>
      Securities registered pursuant to
          Section 12(g) of the Act:                   Name of Each Exchange on Which Registered:
--------------------------------------------         ----------------------------------------------------
   Common Stock, par value $.0001 per share                                  None
</TABLE>
         Check whether the issuer (1) has 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 filings requirements for the past 90 days.

         YES      [X]                       NO       [  ]

         Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of the registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-KSB. [ ]

         The registrant's revenues for the most recent fiscal year were
$1,102,060.

         The aggregate market value of the voting common stock held by
non-affiliates of the issuer, as of January 28, 2004 was approximately
$35,664,650 (based on the average closing bid and asked prices of the
registrant's common stock in the over-the-counter market).

         As of January 28, 2004, 26,692,788 shares of the registrant's common
stock, par value $.0001 per share, were issued and outstanding.

         Documents Incorporated by Reference:  None.



<PAGE>

                                                  TABLE OF CONTENTS
<TABLE>
<S>                 <C>                                                                                         <C>
PART I
   ITEM 1     -     DESCRIPTION OF BUSINESS...................................................................    1
   ITEM 2     -     DESCRIPTION OF PROPERTY...................................................................   18
   ITEM 3     -     LEGAL PROCEEDINGS.........................................................................   18
   ITEM 4     -     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.......................................   18

PART II
   ITEM 5     -     MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS..................................   18
   ITEM 6     -     MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.................................   20
   ITEM 7     -     FINANCIAL STATEMENTS......................................................................   27
   ITEM 8     -     CHANGES IN AND DISCUSSIONS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE........
                                                                                                                 27

PART III
   ITEM 9     -     DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH
                        SECTION 16(A) OF THE EXCHANGE ACT.....................................................   28
   ITEM 10    -     EXECUTIVE COMPENSATION....................................................................   29
   ITEM 11    -     SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT............................   30
   ITEM 12    -     CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS............................................   31
   ITEM 13    -     EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K...........................   31
   ITEM 14    -     PRINCIPAL ACCOUNTANT FEES AND SERVICES....................................................   34

   FINANCIAL STATEMENTS                .......................................................................   F-1
</TABLE>

                                       (i)
<PAGE>


                           FORWARD LOOKING STATEMENTS

         Except for historical information, this document contains various
"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 (the "Exchange Act"). These forward-looking statements involve risks
and uncertainties, including, among other things, statements regarding our
revenue mix, anticipated costs and expenses, development, relationships with
strategic partners and other factors discussed under "Description of Business"
and "Management's Discussion and Analysis". These forward-looking statements may
include declarations regarding our belief or current expectations of management,
such as statements indicating that "we expect," "we anticipate," "we intend,"
"we believe," and similar language. We caution that any forward-looking
statement made by us in this Form 10-KSB or in other announcements made by us
are further qualified by important factors that could cause actual results to
differ materially from those projected in the forward-looking statements,
including without limitation the risk factors set forth in this Form 10-KSB.

                                     PART I

ITEM 1.       DESCRIPTION OF BUSINESS

                             BUSINESS OF THE COMPANY

General

         We are a multimedia entertainment company with a focus on developing
entertainment content. We develop, produce and distribute a broad range of
music, motion picture and other filmed entertainment content through our
following operating subsidiaries:

         o  Ruffnation Music, Inc. ("Ruffnation Music");
         o  Metropolitan Recording Inc. ("Metropolitan");
         o  Ruffnation Films LLC ("Ruffnation Films"); and
         o  Snipes Production LLC ("Snipes").

         In addition, we intend to establish a music publishing division, a
television production division and a producer/artist management division. We
have identified a market opportunity in the entertainment industry resulting
from the convergence of music and film in the world's fastest growing consumer
entertainment product, the digital video disc ("DVD"). The percentage of DVD
unit sales has increased in market share for entertainment content delivery to
consumers faster than any format in entertainment history. The DVD has received
overwhelming market acceptance and response. The music industry has used the DVD
to enhance the sale of its products. Many music fans have responded favorably to
concert DVD's and music video DVD's of their favorite artists. It is the vision
of Christopher Schwartz, our Chief Executive Officer, President, director and
principal stockholder, and a pioneer of the Hip-Hop music industry, to focus on
the DVD format as a means to identify and enable creative artists to combine
their visual and audio talents in a consumer product that will protect the
proprietary nature of the content. Our mission is to become an independent
multimedia entertainment company combining state-of-the-art technologies with
creative product that meets the growing demand of today's market.

         As the demand for cost-effective entertainment product, including
digitally recorded music, television programming and film, continues to
increase, we believe that more of the major entertainment companies, including
radio, television, cable, film and Internet service providers, will be turning
towards independent entertainment companies and production facilities to deliver
product and programming to improve their profitability and create market share.

         Our principal executive offices are located at 101 Charles Drive, Bryn
Mawr, Pennsylvania 19010 where we have our corporate, recording and film offices
and our recording production studio.

The Film Division

         Ruffnation Films operates our film division. Ruffnation Films produces,
distributes and markets feature-length DVD films and movies, taking projects
from initial creative development through principal photography,
post-production, distribution and ancillary sales. We believe that fans of





<PAGE>

Hip-Hop and Urban Music are active consumers throughout the world, purchasing
CDs, DVDs, records, clothes and concert tickets. In addition, members of the
Hip-Hop audience are a highly coveted demographic group targeted by advertising
retailers due to their age and spending habits. We believe that outside of
traditional Hollywood productions, there is a shortage of "Lifestyle Specific"
DVD products for the Hip-Hop audience.

         Ruffnation Films will produce low budget films with plots and marquee
name music artists and that are relevant to the mainstream youth culture,
particularly the Hip-Hop and Urban Music audience. Ruffnation Films will produce
soundtracks featuring the aforementioned artists to be sold as a CD packaged
with a DVD for retail sale to consumers. Select projects approved by Sony Music
Entertainment, Inc. ("Sony") will be produced and distributed through Charles
Street, our co-venture with Sony. For each of these projects, Sony will provide
the soundtrack component, giving Ruffnation Films access to Sony marquee artists
and Sony will advance the cost of producing those soundtracks.

         Pursuant to our international business development strategy, we plan to
form joint ventures for co-production of entertainment projects on a
territory-by-territory basis. On occasion we will also obtain the rights to
distribute and exploit entertainment projects in US and foreign markets as well
as co-venture projects for release and development in various media formats.

         Sony Co-Venture
         ---------------

         Charles Street, our co-venture with Sony, will produce and distribute
film projects, as well as their related soundtracks, and will produce and
distribute CDs and other recorded music projects. Ruffnation Films will
supervise the operations of Charles Street on a day-to-day. Pursuant to the
terms of the co-venture agreement, as amended on October 2, 2003, Ruffnation
Films will fund the creation, production and marketing of nine films for Charles
Street. Sony has the right to accept or reject any film in its discretion.
Snipes was the first film we produced under the agreement. With respect to the
production of films, the term of the agreement will continue until the later of
September 30, 2006 and the date we deliver ten films to Sony (the "Film Term").
If Sony determines not to accept or release a particular film, we have the right
to enter into an agreement with a third party on terms and conditions approved
by Sony. Sony has the exclusive right, throughout the world, to manufacture,
market, distribute and exploit on behalf of Charles Street, DVDs and VHS tapes
containing these films. Sony will provide its services on terms on which it
customarily provides such services to its wholly-owned home video affiliates.
Ruffnation Films is responsible for activities relating to production of films
on behalf of Charles Street. Costs incurred by Ruffnation Films in connection
with the production of films are deemed expenses of Charles Street and are
subject to a budget approved by Sony. Sony is responsible for activities
relating to marketing, publicity and promotion of home videos on behalf of
Charles Street. Sony pays marketing costs in connection with the films. Sony is
not obligated to pay or contribute any profit advances, loans, overhead,
production or salary costs toward the production of films.

         A distribution fee equal to 20% of net billings on any film project
will be paid to Sony out of gross revenues generated by sales of the film. All
of Sony's manufacturing and other costs will then be reimbursed out of gross
revenues generated by sales of the film. Next, a distribution of profits will be
made to Ruffnation Films and to Sony proportionately based on the amount of
marketing costs incurred by Sony and the production and marketing costs incurred
by Ruffnation Films. The parties shall receive this distribution until all such
costs have been reimbursed out of the profits of the film. Any additional
profits will be paid 50% to Sony and 50% to Ruffnation Films.

         At any time during the 30-day period commencing eighteen months
following the date of expiration or termination of the Film Term or, for every
two-year period thereafter, for the 30-day period commencing on each biennial
anniversary of the termination or expiration of the Film Term, either Ruffnation
Films or Sony will have the option to trigger a sale of either its or the other
party's interest in the film venture of Charles Street. Either party electing
this option will send written notice to the other party stating the price at
which the electing party wishes to sell its interest. The offeree will then have
the obligation to either purchase all of the offeror's interest in the Charles
Street film venture at such price or sell its interest in the Charles Street
film venture at such price. The offeree will have 30 days after receipt of such
written notice to make its election to purchase the offeror's interest or to
sell its interest. If the offeree does not notify the Offeror of its election
prior to the expiration of the 30-day period, the offeree shall be deemed to
have elected to sell its interest.






                                        2
<PAGE>

         The agreement will allow us to be one of only a small group of
independent entertainment companies nationally to have a co-venture with one of
the five largest international entertainment companies that dominate the world
market.

         Certain aspects of the Sony Co-Venture relating to our record division
are set forth below.

         Film Production
         ---------------

         Our goal is to produce quality films in the low budget range with total
costs of $300,000 to $2,000,000 per film. Our current strategic plan calls for
the production or co-production of three to five films annually. Our ability to
execute this plan is dependent upon our ability to raise additional financing
necessary to fund such productions. Currently, we are reviewing film projects
for development and production and upon obtaining additional working capital, we
will begin the production of new films. In Fiscal 2001 and Fiscal 2002,
Ruffnation Films produced one film entitled Snipes. Ruffnation Films did not
produce any films in Fiscal 2003. In September 2002, Snipes opened in theaters
in New York, Philadelphia, Washington D.C., Detroit, Atlanta and Baltimore.
Snipes has received numerous acclaims including a three-out-of-four star rating
by the Philadelphia Inquirer's movie critic. Snipes premiered at the
Philadelphia Film Festival in April 2002 and was awarded Best Feature Film and
was the official selection of the 2001 Toronto International Film Festival.
Snipes is Richard Murray's directorial debut and stars Nelly, a Grammy award
winning hip-hop artist with approximately 17 million album sales worldwide, Dean
Winters of HBO's OZ, J.D. Williams, Sam Jones III, Schoolly D and Frank Vincent.
On February 25, 2003, the Snipes DVD was released for commercial sale and
distribution through Charles Street.

         Sony is obligated to deliver quarterly reports to us within forty-five
days following the end of each quarter and annual financial statements to us
within ninety days following the end of each calendar year. Through September
30, 2003, the last quarter for which a report has been received, Sony reported
gross billings for Charles Street related to the release of the Snipes DVD/Home
Video of $2,469,147 and net profits of $908,522, of which our portion is
$740,019. Although we may receive additional payments from Charles Street in
Fiscal 2004 related to sales of Snipes, there can be no assurance of the amount
or timing of such payments.

         In November 2002, we entered into a distribution agreement with New
Line Television, Inc. for the distribution of the film Snipes via television in
the United States, its territories and Canada. Pursuant to the distribution
agreement we received an advance in the amount of $400,000. We recognized
$253,986 of net revenue from New Line Television, Inc. as of October 31, 2003.
The remaining amount of the advance was attributed to expenses. Pursuant to the
terms of the distribution agreement, New Line Television, Inc. retains all
monies received up to $1,000,000 pursuant to its licensing of Snipes. To the
extent New Line Television, Inc.'s receipts from the licensing of Snipes exceed
$1,000,000, we will receive the net profits after New Line Television, Inc.
recoups all of its cost, fees and expenses with interest. Accordingly, there can
be no assurance that we will receive additional payments from New Line
Television, Inc. under the distribution agreement.

         Distribution
         ------------

         The Charles Street projects will be given a minimal theatrical release
in approximately ten theaters in fifteen major markets in the United States to
create awareness about a particular film. Ruffnation Films' projects that are
not distributed through Charles Street will be distributed in the United States
through RED Distribution, Inc. ("RED"), Sony's independent distribution system,
and through up to 17 licensees who service the industry throughout the world.
Accordingly, we anticipate that each project will have global distribution
either through Charles Street or through independent distribution. The end
product at retail will be a DVD/CD package that will have a retail price of
approximately $29.99 to $34.99 with an approximate $16 to $20 wholesale price.
Our sales goal is 500,000 to 1,000,000 units worldwide for each project. We
intend to distribute to the rental market using direct distribution and revenue
share output arrangements with Blockbuster and other leading rental retailers.
In addition, when the opportunity arises we intend to distribute or sell
directly to mass merchandisers, such as Wal-Mart Stores Inc., Costco Wholesale
Corporation, Target Corporation, Best Buy Co. Inc., and others who buy large
volumes of videos and DVDs to sell directly to the consumer.

         Currently there have been very few products released in the DVD/CD
combination package. It is very uncommon for major and independent distribution
companies in film and music to come together on one product for distribution.
Historically, film companies have been reluctant to give DVDs to music companies
and music companies have been reluctant to give CDs to film companies for
distribution. Our goal is to effectively pioneer this format and become a leader
in this marketplace. Each film project will have the potential to allow us to
capitalize on every potential revenue stream across the board for each of our
divisions in terms of film, studio, publishing and management operations.





                                        3
<PAGE>

         Pay and Free Television Distribution
         ------------------------------------

         We intend to license our own productions and productions acquired from
third parties to the domestic and international marketplace on a project basis
through Sony or independent distributors on a territory-by-territory basis.

The Record Division

         Ruffnation Music operates our record division. We believe that the next
five years will offer important opportunities for the organization and growth of
viable, newly created record companies. We believe that such companies will be
more competitive because they have the ability to be flexible, responsive and
are not constrained by the typical large company bureaucracy.

         A popular music record company depends on its ability to sign and
retain artists who will appeal to popular taste over a period of time. We will
employ a popular music artist and repertoire ("A&R") staff whose task will be to
identify both new artists with potential appeal and established artists who will
complement our planned artist roster or whose potential we believe has not been
fully exploited. The A&R staff, which is headed by Christopher Schwartz, will
include a group of producers/songwriters and will meet on a regular basis to
discuss tapes of artists who have been previously screened by staff members. If
a consensus is reached to attempt to sign an artist, a strategy will be
developed for a contract proposal. Currently, we are evaluating several artists
with whom we would consider entering contracts. However, such considerations are
contingent upon our ability to obtain a sufficient amount of additional
financing. There can be no assurance that we will be able to attract and sign
artists or that such artists will be successful.

         Sony Co-Venture
         ---------------

         During the period ending on the later of the Film Term and the
expiration of the term of the distribution agreement which we anticipate
entering into with RED (the "Label Term"), Sony has the exclusive right, on an
artist by artist basis and subject in each case to our written approval, which
we may not unreasonably withhold, to require any record label owned or
controlled by Ruffnation Films or Christopher Schwartz to transfer to Charles
Street all of its or his rights and obligations in and to any particular
recording artist (each a "Designated Artist") whose records have been
distributed by RED. Sony has no obligation to accept, and we have no right to
require them to accept, any of our artists as Designated Artists.

         Subject to the terms and conditions of the co-venture agreement, Sony
has the exclusive right, throughout the world, to manufacture, market,
distribute and exploit records and soundtracks containing musical performances
of Designated Artists on the terms which Sony customarily provides such services
to its wholly-owned record labels. If Sony decides not to manufacture, market or
distribute a record or soundtrack relating to one of our films, then we may
enter into a contract with a third party.

         During the Label Term, provided there are no material defaults, Sony
will extend a loan to Charles Street through a line of credit to fund all
recording costs, advances and royalties relating to the creation, marketing and
exploitation of records and soundtracks. These costs shall be deemed expenses of
Charles Street. In order to secure its obligation to repay these loans, Charles
Street granted to Sony a first priority security interest in all of the assets
of Charles Street.

         During the Label Term, neither Ruffnation Films, Christopher Schwartz
nor any entity owned or controlled by Ruffnation Films or Christopher Schwartz,
will furnish the services of any artist to any person or entity except Sony,
with the exception of the independent labels discussed below, unless Sony
consents to such action. At the end of the Label Term, we will no longer be
required to furnish the services of our artists to Sony or Charles Street. Sony
is obligated to license to Charles Street master recordings owned or controlled
by Sony for inclusion in films, home videos and soundtracks.





                                        4
<PAGE>

         Sony will pay all manufacturing and marketing costs associated with
each record or soundtrack produced by Charles Street, which costs will be
expenses of Charles Street. A distribution fee equal to 20% of net billings on
any recording project will be paid to Sony out of gross revenues generated by
sales of the recording. Any loans advanced by Sony pursuant to the line of
credit will be repaid out of gross revenues generated by sales of the recording
provided that, Ruffnation Films may receive 50% of its share of the profits
relating to any artist agreement for which Charles Street has recouped all
expenses. All remaining profits derived from the sale of records and soundtracks
will be distributed 50% to Sony and 50% to Ruffnation Films.

         At any time during the 30-day period commencing eighteen months
following the date of expiration or termination of the Label Term or, for every
two-year period thereafter, for the 30-day period commencing on each biennial
anniversary of the termination or expiration of the Label Term, either
Ruffnation Films or Sony will have the option to trigger a sale of either its or
the other party's interest in the recording venture of Charles Street. Either
party electing this option will send written notice to the other party stating
the price at which the electing party wishes to sell its interest. The offeree
will then have the obligation to either purchase all of the offeror's interest
in the recording venture of Charles Street at such price or sell its interest in
the recording venture of Charles Street to the offeror at such price. The
offeree will have 30 days after receipt of such written notice to make its
election to purchase the offeror's interest or to sell its interest. If the
offeree does not notify the offeror of its election prior to the expiration of
the 30-day period, the offeree shall be deemed to have elected to sell its
interest.

         Independent Label
         -----------------

         Our co-venture agreement with Sony permits us to form independent
record labels to develop recording projects with artists and producers
independent of Charles Street. On occasion, we will identify artists and
producers that have a niche market segment that can be developed to create
popularity and recognition for a new creative talent. Many of these acts will
require little or no artist or producer advances and little or no recording
costs. Our independent labels will have a flexible style of deal making
involving different profit participation levels with artists and co-ownership of
masters and licensed masters. We believe that our independent labels will be
distributed by RED and a network of distributors in Europe and Asia.

         We anticipate that our distribution agreement with RED will provide
that RED, at is own expense, will warehouse and solicit sales of our recording
products. Once a record is ready for release by us, RED will include the
appropriate pricing information and a description of the song in its monthly
products release book. Sales representatives from RED's sales branches
throughout the country and other record labels affiliated with RED will solicit
orders on our behalf. We will maintain control over the promotion and marketing
of our recordings. However, at our request, RED may assist us, at our expense,
in coordinating various types of marketing, promotion and placement of
advertising directed toward its retail and wholesale accounts. Generally, we
will not be required to pay the manufacturing and distribution costs associated
with CDs prior to their manufacture by RED. We will generally be permitted to
pay these expenses out of the sales proceeds generated by these CDs. However, in
order to secure our obligation to pay these expenses, we believe that we will be
required to grant a security interest to RED in and to the master recordings
that are covered by the distribution agreement. We believe that the term of the
distribution agreement with RED will expire three years after the initial
commercial release of the first album distributed by RED.

         Artist Recording Contracts
         --------------------------

         We will concentrate on the development of new talent rather than
competing with larger companies to acquire established artists. We believe that
the risks involved with higher advances and royalties demanded by established
artists may be difficult to justify financially. In addition to the lower
financial cost of signing and developing new talent, we believe that it
generally is easier to negotiate a longer contract term with new talent, whereas
established artists demand higher payments accompanied by shorter contract
terms. We recognize that established artists have existing fan support and name
recognition. However, we have determined that the cost associated with retaining
established artists represents a significantly greater financial risk if a
recording project fails to achieve minimum consumer sales in an intensely
competitive market. From time to time we may sign artists who require advances
because they have established sales bases.

         Pursuant to our strategy of identifying, signing and developing new
talent, the artists whom we intend to sign will generally have limited recording
industry backgrounds. For the most part, these artists will be identified and
contracted by us after analysis of demonstration tapes by our A&R department and
after consultation among our senior management.





                                        5
<PAGE>

         The Rock and Pop music genres will enable us to compete in a market
segment comprising 33.7% of gross business in the United States record industry.
Likewise, activity in the Rap/Hip-Hop, R&B/Urban segment of the market will put
us into an additional 25% of gross business in the United States record
industry. We may seek to develop divisions that will address the remaining
segments of the market, which includes jazz, Latin and other musical styles.

         Although we may from time to time license already completed master
recordings for a fixed price plus royalty, we will primarily be involved in the
actual production of master recordings. This aspect of the recording business
will require our management to approve a specific project and then contract with
recording artists, musicians and producers to produce a master recording. The
artist and producer will each receive either a minimum fee plus a percentage
royalty based on the proceeds received by us from distribution of a recording or
a percentage royalty without a minimum fee. The fee and royalty arrangements
will be negotiated on a recording-by-recording basis. We will produce recordings
in our own studios or by renting time at any one of a number of recording
studios. Management therefore seeks to reduce or eliminate certain costs and to
match the specific configuration of a particular studio to the requirements of a
particular artist or producer.

         Certain production and acquisition costs, such as artists' and
producers' royalties, are contingent upon subsequent sales while other costs,
such as salaries, overhead, manufacturing, studio time and other expenses, are
payable regardless of sales. Although the appeal of a particular artist may be
transitory, we believe that increasing the size and diversity of our planned
artist roster gives us a measure of protection against sudden shifts in taste.
Further, we believe that acquisition of interests in recorded music composition
catalogues will provide an important and relatively stable source of future
sales in addition to revenue generated from new releases.

         Promotion and Marketing
         -----------------------

         We plan to release records primarily in pop, neo-classical soul and
Rap/Hip-Hop, dance and alternative music fields. Accordingly, we expect to
market our records to the principal buying groups in the 12 to 45 year old
categories broadly representative of the American population in that age group.

         We plan to promote our recordings, as is generally the case throughout
the record industry, primarily through radio time. To supplement our staff, we
may engage independent promotion specialists on a record-by-record basis to
generate airplay. As sales increase, management may add additional promotion
staff.

         Cable operations, such as MTV, VH-1 BET and other music television
channels, as well as certain commercial television stations, have provided
significant exposure to new music groups. We intend to utilize television as a
promotional tool. In addition, we intend to produce promotional videotapes, CDs
and DVDs featuring our artists, and maintain effective cost controls through the
use of our own music video production department.

         The music video and DVD market has grown significantly over the past
few years and we believe that the music video and DVD business is a natural
extension of our other planned activities in the music business. Our music video
department will concentrate primarily upon promotional activities for our
artists to produce videos of single songs for promotional purposes. Generally,
income from music videos is derived from television broadcasts and from the sale
of videocassettes, CDs and DVDs. We may make electronic press kits ("EPKs"),
long-form videos and enhanced videos or CD-ROMS playable on computer. We also
may combine artist videos and EPKs for release on DVD, providing a whole new
format for viewing which was previously limited to television broadcasts. Our
music and videos may also be included in real player packages. We anticipate
experiencing increased activity as we enter into contracts with additional
artists. In such event, longer music programs, such as DVDs or concert programs,
are contemplated.

         The marketing methods which we plan to use are customary in the music
industry. These methods will include:

         o  radio;
         o  television;
         o  newspaper and magazine advertising;
         o  distribution of posters featuring our artists and records;
         o  street teams;
         o  wrapped vans and trucks;
         o  bus backs, bus stops and benches;






                                        6
<PAGE>

         o  billboards;
         o  marquee style movie lights at label sponsored events and artists
            shows; and
         o  coordinated promotions with retail stores such as in-store displays
            and appearances by performers.

Initially, our principal efforts will be focused on radio promotion through
radio play of artist's singles to develop consumer recognition and product
demand. We plan future advertising in national music consumer publications and
industry trade publications as artists achieve increasing consumer recognition,
provided such additional advertising, in management's opinion, would enhance
sales.

         Licensing of Recordings
         ----------------------

         We also intend to license rights in certain of our recordings to other
major record labels for manufacture and distribution in foreign markets. These
labels normally pay all distribution and marketing costs and, in addition, pay
us an advance plus a royalty based on sales, which is payable after recovery of
the advance. A portion of any royalties received by us from sales will be used
to pay artists' and producers' royalties or the owner of a master recording, as
the case may be.

         We will seek agreements to license recordings of several of our future
artists through various record and licensing companies in Europe and Japan. We
intend to negotiate with several foreign distributors for the right to license
other artists. We intend to direct a material part of our future activities
toward the development of international markets.

         Copyright
         ---------

         Our business, like that of other record companies, primarily rests on
ownership or control and exploitation of musical works and sound and
audio-visual recordings.

         Rights and royalties relating to particular recordings vary from case
to case. When a recording is made, copyright in that recording vests either in
the recording artist and is licensed to a record company or in the company
itself, depending on the terms of agreement between the recording artist and the
record company. Similarly, when a musical composition is written, copyright in
the composition vests either in the writer and is licensed to a music publishing
company or in the publishing company. Artists generally record songs that are
controlled by music publishers. The rights to reproduce such songs on tapes and
CDs are obtained by the company from music publishers or collection societies on
their behalf. The manufacture and sale of tapes and CDs results in royalties
being payable by the record company to the publishing company at industry agreed
or statutory rates for the use of the composition and the publishing company in
turn pays a royalty to the writer and by the record company to the recording
artist for the use of the recording.

         Record companies are largely dependent upon legislation to protect
their rights against unauthorized reproduction, importation or rental. In all
territories where we intend to operate, our products will receive some degree of
copyright protection. The period of protection varies widely from 75 years from
first publication in the United States, to 50 years in the United Kingdom, to 30
years from date of recording in Japan.

         Piracy, or the unauthorized reproduction of recordings for commercial
sales and Internet file sharing exists throughout the world. Sales in certain
markets are very difficult, and some markets are virtually closed to legitimate
record companies because of the dominance of pirated product, which is
substantially cheaper than legitimate products due to lower quality standards
and the absence of recording and royalty costs. In recent years, however,
certain countries, particularly in Southeast Asia, have enforced copyrights
resulting in a reduction in piracy. There can be no assurance that the
proliferation of piracy of entertainment content through the Internet or other
means will be reduced in the future. The proliferation of these practices, if
continued, could have a material adverse affect on the entertainment industry.

         Home taping, or the unauthorized reproduction for personal use of
recordings, has been a global problem since the advent of cassette tapes and
CDs, which existing copyright laws have done little to contain. In some
countries, the industry has been successful in securing the introduction of a
levy on hardware used for such reproduction or on blank tapes. However, such
levies, which are generally shared among those involved in the production of
recordings, including the record companies and the artists, do not adequately
compensate for the losses suffered from home taping. CD recording technology may
increase the opportunity for consumers to make high-quality copies for home use.
There can be no assurance that the proliferation of piracy of entertainment
content through the Internet or other means will be reduced in the future that,
if continued, could have a material adverse affect on the entertainment
industry.






                                        7
<PAGE>

         Rental of tapes and CDs is a problem in those countries whose copyright
laws do not provide adequate protection. Those countries include Japan, where a
levy on rental income is paid to domestic rights owners, but not in respect of
foreign repertoire, and Germany.

         The recorded music industry has been affected by piracy, and in
particular, the home copying and file sharing of recorded music over the
Internet. Recording technologies have been developed that enable consumers to
make high quality duplicates of recorded music from original CDs and the
Internet. In the absence of adequate copyright protection, CD recording
technology may adversely affect sales of CDs. We cannot predict the extent to
which our CD sales would be affected by such technology. However, we generally
believe that as we focus on the development of new artists and have a limited
release schedule, we are not materially dependent upon foreign sales in markets
unregulated by copyright laws and that piracy or illegal home taping will not
have a material adverse impact on our business or operations in the near or
foreseeable future.

The Music Publishing Division

         We intend to establish a music publishing division. Music publishing
involves the acquisition of rights to the exploitation of musical compositions
as opposed to musical recordings. Principal sources of revenue are royalties
from the reproduction of musical works on cassette tapes, CDs, DVDs, license
fees from the radio and television broadcast (i.e., public performances) of such
musical works, and film soundtracks of recordings embodying the compositions
concerned.

         We intend to create a music publishing operation to collect performance
royalties for our products through ASCAP and BMI. ASCAP and BMI are collecting
societies licensed to collect performance royalties due from radio, television,
jukeboxes, film and similar venues for public performance of musical
compositions.

         We may receive publishing royalties on master recordings which we
produce. Moreover, we intend to negotiate with recording artists a percentage of
the copyright rate that is set by statute and modified from time to time by the
Copyright Royalty Tribunal.

         Once we form a publishing operation, we plan to seek to acquire
copyright ownership of, or other rights in, the songs written by or for our
artists. We propose to develop a catalogue of songs, retaining present and
future publishing rights. Additionally, we intend to employ songwriters and
producers to develop music products with publishing rights retained by us. We
plan to acquire interests in original songs that will be developed at our
facilities. We do not deem the acquisition of these songs to be material in that
presently none have been recorded or used in any of our activities, including
promotion, and we have no present intention or plans to use them in any
capacity. In the future, it is conceivable that songs commissioned or acquired
by us may be included on albums or produced as singles, although no assurance
can be given as to this use. We intend to use EMI Music Publishing to administer
our songs outside of the United States.

The Studio Division

         Metropolitan operates our studio division, which provides support for
the in-house recording of our artists. Metropolitan is an audio recording
facility that provides us with "start to finish" music recording services.

         We intend to provide audio recording services to the music industry,
including national and international recording companies, independent record
producers and other entities which request the services of the recording
facilities. The studio division will seek to combine technological expertise and
creative, experienced management in the state-of-the-art commercial recording
facilities.

         Metropolitan consists of three studios and is capable of tracking to
tape or digitally. The studio features custom acoustical design treatments,
which provide a critically accurate listening environment. The studio's
equipment includes:

         o a 72-input SSL Series 9000;
         o a top-of-the-line recording/mixing console;







                                        8
<PAGE>

         o two Studer A-827 2-inch tape machines;
         o two ProTools 5.1 Mix Plus Cubes; and
         o Quested Q212s monitors.

         Metropolitan's studios also feature a vintage Helios console. The
Helios provides a rare and unique analog sound and is one of only 500 in
existence. Metropolitan also includes fully equipped digital film and editing
facilities for film, video and television productions. We view the sound studios
principally as a catalyst to attract artists and to record their products
in-house. We will sell studio time when the studios are not in use for in-house
production.

                               INDUSTRY BACKGROUND

The Recorded Music Industry

         The recorded music industry has experienced substantial revenue growth
since its inception and is dominated by four major international entertainment
companies:

         o Universal Music Group;
         o Time Warner Inc.;
         o Sony Corp. (Sony Music Entertainment)/Bertelsmann AG (BMG); and
         o EMI Group PLC.

         In the late 1940's, record retail sales amounted to only $48 million
annually. By 1970, sales had grown to nearly $1.7 billion annually. By way of
current comparison, the Recording Industry Association of America ("RIAA")
reported the sound recording domestic market in 2002 to be $12.6 billion. The
International Federation of Phonographic Industry ("IFPI"), an organization that
represents the recording industry worldwide, reported recorded music sales
worldwide of $32 billion in 2002. This revenue growth has resulted from a
combination of factors, the most important of which has been rapidly developing
technology. Since 1984, the value of sales industry wide has increased at a
faster rate than unit volume growth, due in part to the introduction and
acceptance of CDs, which are priced substantially higher than vinyl records and
tapes. CDs represented 91 percent of all units shipped in 2002. IFPI reports
that sales of recorded music in 2002 to be largest in the United Kingdom, the
United States, Japan, Australia, Germany, France, Canada and Spain. The
proportion of global music sales accounted for by the world's top ten markets
was 84 percent in 2002. Globally, music video sales increased in 2002, boosted
by the DVD video. The United States represents approximately 40 percent of the
total world music market. The RIAA reports that, in 2002, Rock remained the most
popular genre of music in the United States with 24.7 percent of the market
followed by Rap/Hip-Hop with 13.8 percent, R&B/Urban with 11.2 percent, Country
music with 10.7 percent, Pop with 9.0 percent, Jazz with 3.2 percent and
Classical with 3.1 percent of all music items purchased.

         Both the RIAA and IFPI reported that the increased availability of free
music via mass digital copying and internet piracy have had a substantial
negative impact on the recorded music industry in 2002 and the industry is
aggressively pursuing strategies to resolve the erosion of unit shipments and
sales in the world market. In 2002, digital copying and Internet piracy have
resulted in an approximate 7 percent decline in worldwide revenues as well as an
approximate 8 percent decline in units sold worldwide. This decline continued in
2003.

         Music is also an essential part of the advertising and film industries.
Music contributes significantly to the success of advertising. Additionally,
music has become an integral part of film, as seen from the successes of many
musical soundtracks of popular movies. Film soundtracks have also produced a
number of hit singles worldwide. The growth of the DVD format has demonstrated
an increased demand for DVD products.

         Foreign record sales account for over one-half of worldwide record
sales. English versions of popular hits have achieved acceptance and success
throughout the globe. Examples are the foreign chart successes of such artists
as Limp Bizkit, Destiny's Child, Linkin Park and many others. Generally, the
U.S. record industry is expanding its international liaisons through worldwide
licenses.

         Music publishing rights serve as an additional and significant source
of earnings for record companies. Publishing and sub-publishing revenues are
generated for each song contained in an album, cassette or CD.





                                        9
<PAGE>

The Feature Film Industry

         General
         -------

         The feature film industry encompasses the development, production and
distribution of feature-length motion pictures and their subsequent distribution
in the home video, television and other ancillary markets. The major studios
dominate the industry, some of which have divisions that are promoted as
"independent" distributors of motion pictures, including:

         o  Universal Pictures, Warner Bros. (including New Line Cinema and
            Castle Rock Entertainment);
         o  Twentieth Century Fox, Sony Pictures Entertainment (including
            Columbia Pictures and Columbia Tristar Motion Picture Group);
         o  Paramount Pictures;
         o  The Walt Disney Company (including Buena Vista Pictures, Touchstone
            Pictures and Miramax Film Corp.); and
         o  Metro-Goldwyn-Mayer Inc. (including MGM Pictures, United Artists
            Pictures Inc., Orion Pictures Corporation and Goldwyn Entertainment
            Company).

         In recent years, however, true "independent" motion picture production
and distribution companies have played an important role in the production of
motion pictures for the worldwide feature film market.

         Independent Feature Film Production and Financing
         -------------------------------------------------

         Generally, independent production companies do not have access to the
extensive capital required to make feature-length motion pictures, such as the
"blockbuster" films produced by the major studios. They also do not have the
capital necessary to maintain the substantial overhead that is typical of
operations of major studios. Independent producers target their product at
specialized markets and usually produce motion pictures with budgets of less
than $20 million. Generally, independent producers do not maintain significant
infrastructure. They instead hire only creative and other production personnel
and retain the other elements required for development, pre-production,
principal photography and post-production activities on a project-by-project
basis. Also, independent production companies typically finance their production
activities from bank loans, pre-sales, equity offerings, co-productions and
joint ventures rather than out of operating cash flow. They generally complete
financing of an independent motion picture prior to commencement of principal
photography to minimize the risk of loss.

         Independent Feature Film Distribution
         -------------------------------------

         Film distribution encompasses the exploitation of motion pictures in
theatres and in markets, such as home DVD and video, pay-per-view, pay
television, free television and ancillary markets, such as hotels, airlines and
streaming films on the Internet. Independent producers do not typically have
distribution capabilities. Instead, these producers rely on advances from
domestic and international distributors who approve their projects before
production commences, as well as profit sharing or equity arrangements for
individual projects. Generally, the local distributor in any country or region
will acquire distribution rights for a motion picture from an independent
producer using one or more of these methods. The local distributor will agree to
advance the producer a non-refundable minimum guarantee. The local distributor
will then generally receive a distribution fee of between 20% and 35% of gross
receipts, while the producer will receive a portion of gross receipts in excess
of the distribution fees, distribution expenses and monies retained by
exhibitors. The local distributor and theatrical exhibitor generally will enter
into an arrangement providing for the exhibitor's payment to the distributor of
a percentage of the box-office receipts for the exhibition period, generally 40%
to 50%, depending upon the success of the motion picture.

COMPETITION

         The recorded music, motion picture, and music publishing industries are
highly competitive. We will compete with other companies for artists, airtime
and space in retail outlets. We are not at present, and do not expect in the
foreseeable future, to be a significant participant in the marketplace. We face
competition from companies within the entertainment business and from
alternative forms of leisure entertainment, such as travel, sporting events,
outdoor recreation and other cultural activities. We compete with the major
media and entertainment companies and studios, numerous independent motion
picture, recorded music, music publishing and television production companies,
television networks and pay television systems for the acquisition of literary




                                       10
<PAGE>

and film properties, the services of performing artists, directors, producers
and other creative and technical personnel and production financing. In
addition, our music and motion picture productions compete for audience
acceptance and exhibition outlets with music and motion pictures produced and
distributed by other larger more established companies. As a result, the success
of any of our recorded music products or DVD/motion pictures is dependent not
only on the quality and acceptance of a particular production, but also on the
quality and acceptance of other competing productions released into the
marketplace at or near the same time.

         The entertainment industry is highly competitive, rapidly evolving and
subject to constant change. Other entertainment companies currently offer one or
more of each of the types of products and services we plan to offer. Some of our
competitors in the entertainment market will include Time Warner, Sony/BMG, EMI,
Disney, Viacom and numerous independent companies. Some of our competitors in
the music business will include Motown, Time Warner Inc., Universal Music Group,
Interscope, Sony/BMG and EMI. We expect that our film business will compete with
well-established companies, including MGM, Dreamworks, Time Warner Inc. and
numerous smaller independent companies, which produce, develop or market films,
DVD's, television and cable programming.

EMPLOYEES

         As of October 31, 2003 we had one full-time employee in our operations.
We use and plan to continue using independent consultants, producers,
professionals and contractors on an as needed basis. Upon obtaining additional
financing, we will hire additional employees in connection with the production
of our recorded music and film productions. We believe that our employee and
labor relations are good. Our full-time employee is not a member of any union.
On film projects, we may employ members of a number of unions, including the
International Alliance of Theatrical and Stage Employees, the Screen Actors
Guild and the Teamsters. A strike by one or more of the unions that provide
personnel essential to the production of films could delay or halt our ongoing
production activities. Such a halt or delay, depending on the length of time
involved, could cause delay in our release of new films and thereby could
adversely affect our cash flow and revenues.

RISK FACTORS

         In addition to other information included in this report, the following
factors should be considered in evaluating our business and future prospects.

         We need to obtain financing in order to continue our operations.

         On a prospective basis, we will require both short-term financing for
operations and long-term capital to fund our expected growth. We have no
existing bank lines of credit and have not established any definitive sources
for additional financing. Based on our current operating plan, we will not have
enough cash to meet our anticipated cash requirements through January 31, 2005
if we do not raise at least $7,500,000 from the sale of our securities or other
financing means. While we are in discussions and have entered agreements with
potential financing sources, we currently do not have definitive arrangements
with respect to, or sources of, additional financing. Additional financing may
not be available to us, or if available, then it may not be available upon terms
and conditions acceptable to us. If adequate funds are not available, then we
may be required to delay, reduce or eliminate product development or marketing
programs. The entertainment industry is rapidly evolving. Our inability to take
advantage of opportunities in the industry because of capital constraints may
have a material adverse effect on our business and our prospects.

         We have approximately $1,735,000 in indebtedness and approximately
$2,800,000 in accounts payable and accrued expenses; if we are unable to satisfy
these obligations, then our business will be adversely effected.

         We presently have indebtedness in the aggregate principal amount of
approximately $1,735,000 and accounts payable and accrued expenses of
approximately $2,800,000. Approximately $4,535,000 from the net proceeds of any
additional financing will be used to satisfy our existing loans and obligations
which have matured or will mature in the next twelve months and a portion of the
net proceeds of any additional financing will be used to pay down accounts
payable and accrued expenses. Approximately, $1,119,000 of this indebtedness
consists of amounts owed to our Chief Executive Officer pursuant to demand
promissory notes. Approximately $435,000 of this indebtedness consists of
amounts owed to third party lenders pursuant to a promissory note that matures
on April 30, 2004. Approximately $62,000 is owed to a third party lender
pursuant to promissory notes that are due and payable on demand. In addition, we
are presently in technical default on a $162,000 loan which we received from a




                                       11
<PAGE>

bank. As of January 27, 2004 the outstanding balance of this loan was $134,643.
Although we have made all required payments under this loan and the bank has not
taken any action with respect to this technical default, if the bank elected to
exercise its rights under its security agreement, it could foreclose on our
assets in order to satisfy this indebtedness. Any such action would adversely
effect our operations. In addition, due to our present lack of liquidity, we
have not had the ability to pay approximately $2,800,000 of accounts payable and
accrued expenses.

         We are dependent on the operations of Charles Street, a co-venture
which we operate with Sony, for a substantial portion of our revenues.

         We entered into a co-venture agreement with Sony, a major international
entertainment company. We intend to release a series of DVD films and soundtrack
records through this co-venture, Charles Street. While we also plan to
independently distribute records under private labels, we will depend on Charles
Street for a substantial portion of our revenues. There is no assurance that we
will obtain sufficient financing or that Charles Street will be funded
sufficiently to enable us to produce each DVD film and record we intend to
release. Any failure to produce each DVD film and soundtrack record which we
intend to release will have a material adverse effect on our business, results
of operations and financial condition. Pursuant to the terms of the co-venture
agreement with Sony, the final decision regarding whether or not a particular
film project or soundtrack is made through Charles Street is in the discretion
of Sony. If Sony determines that it does not want to produce our projects
through Charles Street, then we will be forced to produce these projects
independently and they will not obtain the benefits of the marketing and
distribution support of Charles Street. It will be significantly more difficult
for us to produce and distribute such projects. In addition, pursuant to the
co-venture agreement, we will refer recording artists to Charles Street for the
production, marketing and distribution of CDs and other recordings. Sony has the
exclusive right, on an artist-by-artist basis, to require us to assign our
contract rights to work with a recording artist to Charles Street. Charles
Street will then have the exclusive right, throughout the world to exploit any
recordings made by such artists. If Sony determines that it does not wish to
produce and distribute recordings made by our artists through Charles Street,
then we will be forced to produce these CDs through our independent label and
distribute them through RED, Sony's independent label distribution channel, and
we will not obtain the benefits of the marketing and distribution support of
Charles Street for these projects. Accordingly, it will be more difficult for us
to produce and distribute such projects.

         Independent distributors will be a significant element of our growth
strategy.

         We will rely on independent distributors to distribute a significant
portion of our entertainment products and services when developed. A significant
element of our growth strategy will be to increase the sale and distribution of
our products and services by expanding our presence in local markets and by
extending this network into new markets either by internal growth, joint
ventures, licensing, acquisition or other means. We may not be able to develop,
recruit, maintain, motivate, retain or control a network of independent
distributors. In addition, we have little control over the resources that
independent distributors will devote to marketing our products and the amount of
our competitors' products that our independent distributors choose to market.
Any decision by a distributor to not distribute or promote our products or
services or to promote our competitors' products and services could have a
material adverse effect on our business, results of operations or financial
condition.

         We have a limited operating history in the entertainment industry.

         We have a limited history in the entertainment industry. On October 2,
2002, we entered into a Share Exchange Agreement with Christopher Schwartz,
pursuant to which we acquired all of the issued and outstanding common stock of
Metropolitan Recording Inc. and all of the membership interests of each of
Ruffnation Films and Snipes Productions. Our strategy is to become an
independent multimedia entertainment company. In addition to operating a music
division, recording studio division and film production company, we plan to
establish television, publishing and management operations. Prior to entering
into the Share Exchange Agreement, we did not operate in the multimedia and
entertainment industry. Accordingly, we have a limited history in the industry
in which we operate.

         We have a history of losses and expect that losses may continue in the
future.

         Our net loss for the fiscal year ended October 31, 2003 totaled
$6,586,034 compared to a net loss of $890,776 for the ten months ended October
31, 2002. In addition, we had negative working capital of $3,447,584 at October
31, 2003 and experienced negative cash flow from operations of $252,411 during
the fiscal year ended October 31, 2003. We expect that production and
development, marketing and operating expenses will increase significantly during





                                       12
<PAGE>

the next several years. In order to achieve profitability, we will need to
generate significant revenue. We cannot be certain that we will generate
sufficient revenue to achieve profitability. We anticipate that we will continue
to generate operating losses and negative cash flow from operations at least
through the end of Fiscal 2004. We cannot be certain that we will ever achieve,
or if achieved, maintain profitability. If our revenue grows at a slower rate
than we anticipate or if our project development, marketing and operating
expenses exceed our expectations or cannot be adjusted accordingly, our
business, results of operation and financial condition will be materially
adversely effected.

         Shares of our common stock lack a significant trading market.

         Shares of our common stock are not eligible for trading on any national
or regional exchange. Our common stock is eligible for trading in the
over-the-counter market on the Over-The-Counter Bulletin Board pursuant to Rule
15c2-11 of the Securities Exchange Act of 1934. This market tends to be highly
illiquid, in part because there is no national quotation system by which
potential investors can trace the market price of shares except through
information received or generated by certain selected broker-dealers that make a
market in that particular stock. There are currently no plans, proposals,
arrangements or understandings with any person with regard to the development of
a trading market in our common stock. There can be no assurance that an active
trading market in our common stock will develop, or if such a market develops,
that it will be sustained. In addition, there is a greater chance for market
volatility for securities that trade on the Over-The-Counter Bulletin Board as
opposed to securities that trade on a national exchange or quotation system.
This volatility may be caused by a variety of factors, including the lack of
readily available quotations, the absence of consistent administrative
supervision of "bid" and "ask" quotations and generally lower trading volume.

         Our success will depend on external factors in the music and film
industries.

         Operating in the music and film industries involves a substantial
degree of risk. Each planned music project, film production is an individual
artistic work, and unpredictable audience reactions primarily determine
commercial success. The commercial success of a music project or a film
production also depends upon:

         o the quality and acceptance of other competing records or films
           released into the marketplace at or near the same time;
         o critical reviews;
         o the availability of alternative forms of entertainment and leisure
           activities;
         o general economic conditions; and
         o other tangible and intangible factors.

         Each of these factors is subject to change and cannot be predicted with
certainty. There can be no assurance that our planned music projects and film
productions will obtain favorable ratings or reviews or that consumers will
purchase our entertainment products and services.

         Our success will be largely dependent upon our key executive officers
and other key personnel.

         Our success will be largely dependent upon the continued employment of
our key executive officers and, particularly, our continued employment of
Christopher Schwartz. The loss of Mr. Schwartz's services would have a material
adverse effect on us. We believe that our continued success will depend to a
significant extent upon the efforts and abilities of our executive officers and
our ability to retain them. Although Mr. Schwartz has entered into an employment
agreement with us, and owns approximately 51% of our issued and outstanding
common stock on an as-converted basis, there is no assurance that Mr. Schwartz
will continue his employment with us. Although we believe that we would be able
to locate a suitable replacement for Mr. Schwartz if his services were lost, we
cannot assure you that we would be able to do so. In addition, our future
operating results will substantially depend upon our ability to attract and
retain highly qualified management, financial, technical, creative and
administrative personnel. Competition for highly talented personnel is intense
and can lead to increased compensation expenses. We cannot assure you that we
will be able to attract and retain the personnel necessary for the development
of our business.






                                       13
<PAGE>

         Unauthorized use of our intellectual property and trade secrets may
affect our market share and profitability.

         We protect intellectual property rights to our productions through
available copyright and trademark laws and licensing and distribution
arrangements with reputable international companies in specific territories and
media for limited durations. Despite these precautions, existing copyright and
trademark laws afford only limited practical protection in certain
jurisdictions. We may distribute our products in some jurisdictions in which
there is no copyright and trademark protection. As a result, it may be possible
for unauthorized third parties to copy and distribute our productions or certain
portions or applications of our intended productions. We will rely on our
copyrights, trademarks, trade secrets, know-how and continuing technological
advancement to establish a competitive position in the marketplace. We will
attempt to protect our intellectual property through copyright and agreements
with future artists and employees. Other companies may independently develop or
otherwise acquire similar creative materials or gain access to our intellectual
property. Despite our precautions, there can be no assurance that we will be
able to adequately protect our intellectual property from competitors in the
future. In addition, litigation may be necessary in the future to:

         o enforce intellectual property rights;
         o to protect our trade secrets;
         o to determine the validity and scope of the rights of others; or
         o to defend against claims of infringement or invalidity.

Any such litigation could result in substantial costs and the diversion of
resources and could have a material adverse effect on our business, operating
results or financial condition.

         Protecting and defending against intellectual property claims may have
a material adverse effect on our business.

         From time to time, we may receive notice that others have infringed on
our proprietary rights or that we have infringed on the intellectual property
rights of others. There can be no assurance that infringement or invalidity
claims will not materially adversely effect our business, financial condition or
results of operations. Regardless of the validity or the success of the
assertion of claims, we could incur significant costs and diversion of resources
in protecting or defending against claims, which could have a material adverse
effect on our business, financial condition or results of operations.

         Piracy, illegal duplication of CDs and DVDs and file sharing of music
and film products over the Internet may have a material adverse effect on our
business.

         Our ability to compete depends in part on the successful protection of
our intellectual property, including our music and film productions. Piracy,
illegal duplication and Internet peer-to-peer file sharing of music and film
products has had an adverse effect on the entertainment industry as a whole. If
new legislation aimed at protecting entertainment companies against piracy,
illegal duplication and Internet peer-to-peer file sharing is not enacted and
enforced, and we are unable to protect our music and film productions from
piracy, illegal duplication and Internet peer-to-peer file sharing, then such
continued activities may have a material adverse effect on our business.

         Advances in technology may have a material adverse effect on our
revenues.

         Advances in technology may affect the manner in which entertainment
content is distributed to consumers. These changes, which might affect the
entertainment industry as a whole, include the proliferation of digital music
players, services that allow individuals to download and store single songs and
pay-per-view movie services. These technological advances have created new
outlets for consumers to purchase entertainment content. These new outlets may
affect the quantity of entertainment products that consumers purchase and may
reduce the amount that consumers are willing to pay for particular products. As
a result, this could have a negative impact on our ability to sell DVD's, CD's
and soundtracks. Any failure to adapt our business model to these changes could
have a material adverse effect on our revenues.






                                       14
<PAGE>

         Our success will depend on our artists.

         We plan to enter into film and recording contracts with several
artists. We cannot assure you that we will be able to retain the artists we plan
to enter contracts with or that we will be able to attract additional artists.
We may not be able to develop our artists successfully or in such a manner that
produces significant sales. Furthermore, each film and recording is an
individual artistic work, the public acceptance of which cannot be known in
advance. Accordingly, we cannot assure you that any film or record released by
any particular artist will experience financial success. In addition, if any
particular artist experiences success, we cannot predict the timing or longevity
of such success or the extent of the popularity of any particular artist.

         We will depend on the continued popularity of urban music.

         We plan to produce records in multiple genres of music including
neo-classical soul and hip-hop. Our proposed artists will be primarily in this
segment of the market. If tastes move away from this type of music and we do not
develop any alternatives, then we may not be able to sell enough entertainment
products and services to be profitable. Although we believe that this sector
will continue to grow, consumer taste is unpredictable and constantly changing,
and we cannot predict with any certainty that this segment will continue to
remain popular.

         Our growth as a multimedia entertainment company depends on the success
and increased use of entertainment products and services.

         The entertainment products and service market is rapidly evolving. The
demand and market acceptance of our planned products and services is uncertain
and subject to a high degree of risk. In order for certain of our planned
entertainment products and services to be successfully accepted in the
marketplace, the production and content of our entertainment products and
services must be accepted as a viable alternative to traditional entertainment
products and services. Because these markets may be new and evolving, it is
difficult to predict the size of the market and its growth rate. If the market
for our entertainment products and services fails to develop or develops more
slowly than we anticipate, we will not be able to generate revenues from our
entertainment products and services at the rate we anticipate. In addition, if
demand for our entertainment products and services grows too quickly, our
infrastructure may not be able to support the demands placed on us by this
growth and our performance and reliability may decline.

         We will be in competition with companies that are larger, more
established and better capitalized than we are.

         The entertainment industry is highly competitive, rapidly evolving and
subject to constant change. Other entertainment companies currently offer one or
more of each of the products and services we plan to offer. Some of our
competitors in the entertainment market will include Time Warner Inc., Sony/BMG,
EMI, Disney and Viacom. Some of our competitors in the music business will
include Motown, Time Warner Inc., Universal Music Group, Interscope, Sony/BMG,
EMI and numerous smaller independent companies. We expect that our film business
will compete with well-established companies, including MGM, Dreamworks, Time
Warner Inc. and numerous smaller independent companies, which produce, develop
or market films, DVD's, television and cable programming. Many of our
competitors have:

         o  greater financial, technical, personnel, promotional and marketing
            resources;
         o  longer operating histories;
         o  greater name recognition; and
         o  larger consumer bases than us.

         We believe that existing competitors are likely to continue to expand
their products and service offerings. Moreover, because there are few, if any,
substantial barriers to entry, we expect that new competitors are likely to
enter the entertainment market and attempt to market entertainment products and
services similar to our products and services, which would result in greater
competition. We cannot be certain that we will be able to compete successfully
in the entertainment, multimedia, music, film, management or television
programming markets.






                                       15
<PAGE>

         Future sales of our securities will dilute the ownership interest of
our current stockholders.

         We expect to sell our equity securities in order to raise the funds
necessary to fund our operations. Any such transactions will involve the
issuance of our previously authorized and unissued securities and will result in
the dilution of the ownership interests of our present stockholders.

         We might expand through acquisitions which may cause dilution of our
common stock and additional debt and expenses.

         Any acquisitions of other companies which we complete may result in
potentially dilutive issuances of our equity securities and the incurrence of
additional debt, all of which could have a material adverse effect on our
business, results of operations and financial condition. We plan to seek
acquisitions and joint ventures that will complement our services, broaden our
consumer base and improve our operating efficiencies. Acquisitions involve
numerous additional risks, including difficulties in the assimilation of the
operations, services, products and personnel of acquired companies, which could
result in charges to earnings or otherwise adversely affect our operating
results. There can be no assurance that acquisition or joint venture
opportunities will be available, that we will have access to the capital
required to finance potential acquisitions, that we will continue to acquire
businesses or that any acquired businesses will be profitable.

         Operating internationally may expose us to additional and unpredictable
risks.

         We intend to enter international markets, licensing arrangements and to
form joint ventures internationally to expand sales of our planned entertainment
products and to market our entertainment products and services. International
operations are subject to inherent risks, including:

         o potentially weaker intellectual property rights;
         o changes in laws and policies affecting trade;
         o difficulties in obtaining foreign licenses;
         o changes in regulatory requirements;
         o instability of foreign economies and governments;
         o instances of war or terrorists activities;
         o unexpected changes in regulations and tariffs;
         o fluctuations in the value of foreign currencies;
         o intricate investment and tax laws, including laws and policies
           relating to the repatriation of funds and to withholding taxes; and
         o uncertain market acceptance and difficulties in marketing efforts due
           to language and cultural differences.

Due to these risks, operating in international markets could have a material
adverse effect on our future business, results of operations or financial
condition.

         Our shares of common stock are subject to penny stock regulation.

         Holders of shares of our common stock may have difficulty selling those
shares because our common stock will probably be subject to the penny stock
rules. Shares of our common stock are subject to rules adopted by the Securities
and Exchange Commission that regulate broker-dealer practices in connection with
transactions in "penny stocks". Penny stocks are generally equity securities
with a price of less than $5.00 which are not registered on certain national
securities exchanges or quoted on the NASDAQ system, provided that current price
and volume information with respect to transactions in those securities is
provided by the exchange or system. The penny stock rules require a
broker-dealer, prior to a transaction in a penny stock not otherwise exempt from
those rules, to deliver a standardized risk disclosure document prepared by the
Securities and Exchange Commission, which contains the following:

         o a  description of the nature and level of risk in the market for
              penny stocks in both public  offerings and secondary trading;




                                       16
<PAGE>

         o a description of the broker's or dealer's duties to the customer and
           of the rights and remedies available to the customer with respect to
           violation to such duties or other requirements of securities laws;
         o a brief, clear, narrative description of a dealer market, including
           "bid" and "ask" prices for penny stocks and the significance of the
           spread between the "bid" and "ask" price;
         o a toll-free telephone number for inquiries on disciplinary actions;
         o definitions of significant terms in the disclosure document or in the
           conduct of trading in penny stocks; and
         o such other information and is in such form (including language, type,
           size and format), as the Securities and Exchange Commission shall
           require by rule or regulation.

Prior to effecting any transaction in penny stock, the broker-dealer also must
provide the customer with the following:

         o the bid and offer quotations for the penny stock;
         o the compensation of the broker-dealer and its salesperson in the
           transaction;
         o the number of shares to which such bid and ask prices apply, or other
           comparable information relating to the depth and liquidity of the
           market for such stock; and
         o monthly account statements showing the market value of each penny
           stock held in the customer's account.

In addition, the penny stock rules require that, prior to a transaction in a
penny stock not otherwise exempt from those rules, the broker-dealer must make a
special written determination that the penny stock is a suitable investment for
the purchaser and receive the purchaser's written acknowledgment of the receipt
of a risk disclosure statement, a written agreement to transactions involving
penny stocks, and a signed and dated copy of a written suitability statement.
These disclosure requirements may have the effect of reducing the trading
activity in the secondary market for a stock that becomes subject to the penny
stock rules.

         Budget overruns may adversely affect our business.

         Actual music projects or film production costs may exceed their budget,
sometimes significantly. Risks such as labor disputes, death or disability of
star performers, rapid high technology changes relating to special effects or
other aspects of production, shortages of necessary equipment, damage to film
negatives, master tapes and recordings or adverse weather conditions may cause
cost overruns and delay or frustrate completion of a production. If a music
project or film production incurs substantial budget overruns, then we may have
to seek additional financing from outside sources to complete production. We
cannot assure you that such financing will be available to us, or if available,
whether such funds will be available to us on acceptable terms. In addition, if
a music project or film production incurs substantial budget overruns, there can
be no assurance that such costs will be recouped, which could have a significant
impact on our business, results of operations or financial condition.

         Our operating results may fluctuate significantly.

         We expect that our future operating results may fluctuate significantly
as a result of the following:

         o the timing of domestic and international releases of future music
           projects, or films we produce;
         o the success of our future music projects or films;
         o the timing of the release of related products into their respective
           markets;
         o the costs to distribute and promote the future music projects and
           films;
         o the success of our distributors in marketing our future music
           projects and films;
         o the timing of receipt of proceeds generated by the music projects,
           and films from distributors;
         o the introduction of new music projects, and films by our future
           competitors;
         o the timing and magnitude of operating expenses and capital
           expenditures;
         o the level of unreimbursed production costs in excess of budgeted
           maximum amounts;
         o the timing of the recognition of advertising costs for accounting
           purposes under generally accepted accounting principles; and
         o general economic conditions, including continued slowdown in
           advertiser spending.





                                       17
<PAGE>

As a result, we believe that our results of operations may fluctuate
significantly, and it is possible that our operating results could be below the
expectations of investors.

         We do not intend to pay cash dividends on our shares of common stock.

         The future payment of dividends will be at the discretion of our Board
of Directors and will depend on our future earnings, financial requirements and
other similarly unpredictable factors. For the foreseeable future, it is
anticipated that any earnings which may be generated from our operations will be
retained by us to finance and develop our business and that dividends will not
be paid to stockholders.

ITEM 2.       DESCRIPTION OF PROPERTY

         Our corporate headquarters is located at 101 Charles Drive, Bryn Mawr,
Pennsylvania 19010 and occupies approximately 7,200 square feet of space under a
lease agreement that expires on August 31, 2004. Metropolitan subleases the
premises from an affiliated entity controlled by Christopher Schwartz. This
affiliated entity is obligated to pay the landlord rent of $15,000 per month of
which Metropolitan pays $10,000 per month. We believe that our current
facilities are adequate to conduct our business operations for the foreseeable
future. We believe that we will be able to renew this lease on similar terms
upon expiration. If we cannot renew the lease agreement, we believe that we
could find other suitable premises without any material adverse impact on our
operations.

ITEM 3.       LEGAL PROCEEDINGS

         We know of no pending legal proceedings to which we or any of our
subsidiaries are a party which are material or potentially material, either
individually or in the aggregate. We are from time to time, during the normal
course of our business operations, subject to various litigation claims and
legal disputes. We do not believe that the ultimate disposition of any of these
matters will have a material adverse effect on our consolidated financial
position, results of operations or liquidity.

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

         No matters were submitted to a vote of security holders during the
fourth quarter of fiscal year 2003.

                                     PART II

ITEM 5.       MARKET FOR COMMON EQUITY AND RELATED SHAREHOLDER MATTERS

         Our common stock is currently quoted on the Over-The-Counter Bulletin
Board under the symbol "TMEG.OB".

Market Information
------------------

         On June 14, 2002 our predecessor, US Patriot, Inc., filed Form 8-A12G
with the Securities and Exchange Commission registering shares of our common
stock under the Exchange Act. Our shares of common stock were first quoted on
the Over-The-Counter Bulletin Board on July 22, 2002. The following table
presents the high and low bid prices per share of our common stock as quoted for
the years ended October 31, 2003 and October 31, 2002 which information was
provided by NASDAQ Trading and Market Services. All amounts have been
retroactively adjusted to reflect a 14-for-1 forward stock split that occurred
on October 7, 2002.

Fiscal Year ended October 31, 2003
--------------------------------------------------------------------------------
Quarter ended:                                High Bid               Low Bid
                                              ----------------------------------
     January 31, 2003                           1.60                   1.25
     April 30, 2003                             1.20                   1.10
     July 31, 2003                              1.15                   1.06
     October 31, 2003                           1.15                   1.02




                                       18
<PAGE>

Fiscal Year ended October 31, 2002
--------------------------------------------------------------------------------
Quarter ended:                                High Bid               Low Bid
                                              ----------------------------------
     July 31, 2002                               --                     --
     October 31, 2002                           1.45                   .05

The above quotations reflect inter-dealer prices, without retail mark-up,
markdown or commission and may not reflect actual transactions. On January 27,
2004, the closing bid price for our common stock was $1.88 per share.

Holders
-------

         As of January 26, 2004 we had 28 stockholders of record of our common
stock. Such number of record holders was derived from the records maintained by
our transfer agent, Stocktrans, Inc.

Dividends
---------

         To date, we have not declared or paid any cash dividends and do not
intend to do so for the foreseeable future. We intend to retain all earnings, if
any, to finance the continued development of our business. Any future payment of
dividends will be determined solely in the discretion of our Board of Directors.

Securities Authorized for Issuance Under Equity Compensation Plans
------------------------------------------------------------------

         On October 9, 2002, pursuant to the Employment Agreement which we
entered into with Christopher Schwartz, we granted Christopher Schwartz the
option to purchase up to 5,786,707 shares of our common stock pursuant to
Section 4(2) of the Securities Act. The exercise price per share of these
options is equal to the closing price of our common stock on the respective
dates that the options vest, as follows:

         o 750,000 shares vested upon the commencement of Christopher Schwartz'
           employment on October 9, 2002 at an exercise price of $1.50 per
           share;
         o 825,000 shares vested on October 9, 2003 at an exercise price of
           $1.09 per share;
         o 907,500 shares vest on October 9, 2004;
         o 998,250 shares vest on October 9, 2005;
         o 1,098,075 shares vest on October 9, 2006; and
         o 1,207,882 shares vest on October 9, 2007.

         In order to exercise each tranche of these options, Mr. Schwartz must
be employed by us on the respective date that each such tranche vests.

         There were no other securities authorized for issuance under equity
compensation plans at January 28, 2004.

Recent Sales of Unregistered Securities and Use of Proceeds

         On October 2, 2002, pursuant to the Share Exchange Agreement and Plan
of Reorganization, we issued 8,000,000 shares of common stock and 1,000,000
shares of Series A Convertible Preferred Stock, $.0001 par value per share, to
Christopher Schwartz pursuant to Rule 506 promulgated under the Securities Act.
Each share of Series A Convertible Preferred Stock is convertible into 10 shares
of common stock at the option of the holder and is entitled to 10 votes in all
matters submitted to a vote of our stockholders.

         On November 1, 2002, we entered into a loan agreement pursuant to which
we borrowed $250,000 from Trident Growth fund, L.P. (f/k/a Gemini Growth Fund,
LP) ("Trident"), a Delaware limited partnership. In connection with this loan,
we issued to Trident a 14% secured convertible promissory note in the principal
amount of $250,000 and a warrant to purchase 62,500 shares of our common stock
pursuant to Section 4(2) of the Securities Act. Our obligation to repay the note
was secured by a security interest granted to the lender covering substantially
all of our assets. The note matured on November 30, 2003. Trident had the option
to convert the principal amount of the note plus all accrued interest into
shares of our common stock at a conversion price of $1.00 per share. The
warrants expire on October 30, 2007 and have an exercise price of $1.50 per
share, subject to antidilution and price adjustments pursuant to the agreements.
We paid loan commitment and origination fees of 1% ($2,500) and 4% ($10,000),
respectively. Interest was payable in cash unless Trident elected to have the




                                       19
<PAGE>

interest paid in shares of our common stock. As described in the loan covenants,
we were required to comply with various financial and other covenants. Any
failure to comply with such covenants could have been deemed a default under the
loan by Trident. As of January 31, 2003, April 30, 2003 and July 31, 2003, we
did not satisfy these financial covenants and were in default under the loan
agreement. On March 27, 2003 Trident waived this default for a period of six
months ending April 30, 2003. On September 11, 2003 Trident waived this default
for a period of six months from April 30, 2003 through October 31, 2003. In
exchange for the waiver by Trident, on March 27, 2003 we issued Trident warrants
to purchase 10,000 shares of our common stock at an exercise price of $1.50 per
share. These warrants were issued pursuant to Section 4(2) of the Securities
Act. In exchange for the waiver by Trident on September 11, 2003, we issued
Trident warrants to purchase 10,000 shares of our common stock at an exercise
price of $1.15 per share. These warrants were issued pursuant to Section 4(2) of
the Securities Act.

         Under the terms of the loan agreement, we were required to register for
Trident the resale of the shares of common stock issuable upon conversion of the
note or exercise of the warrants, within 180 days of the date of the loan
agreement. If the common stock was not fully registered within 180 days, at the
option of Trident, we were subject to a monthly penalty of .1% shares of our
common stock then outstanding computed on a fully diluted basis per day until
the shares were registered.

         As of April 30, 2003 we did not register the resale of the shares of
common stock issuable upon conversion of the note or exercise of the warrants.
However, on June 13, 2003, Trident waived this default for a period of six
months from April 30, 2003 through October 31, 2003. In exchange for the waiver
by Trident, on June 13, 2003 we issued Trident 100,000 shares of our common
stock and warrants to purchase 100,000 shares of our common stock at an exercise
price of $1.13 per share. These shares of common stock and warrants were issued
pursuant to Section 4(2) of the Securities Act.

         On January 12, 2004, the outstanding principal balance of this
promissory note in the amount of $168,788, was converted into 168,788 shares of
our common stock and the promissory note was canceled. We paid all accrued
interest on the principal balance of the promissory note in cash.

         In November 2002, we issued a Stock Purchase Warrant to purchase 33,400
shares of our common stock at an exercise price of $1.50 per share pursuant to
Section 4(2) of the Securities Act to Frank Eiffe in exchange for consulting
services. The Warrant is exercisable for five years and the holder is entitled
to piggyback registration rights.

         In November 2002, we issued a Stock Purchase Warrant to purchase 66,600
shares of our common stock at an exercise price of $1.50 per share pursuant to
Section 4(2) of the Securities Act to Dr. Wolfgang Moelzer in exchange for
consulting services. The Warrant is exercisable for five years and the holder is
entitled to piggyback registration rights.

         In December 2002, we issued a Stock Purchase Warrant to purchase 50,000
shares of our common stock at an exercise price of $1.50 per share pursuant to
Section 4(2) of the Securities Act to BKB Boston K Burg Management GmbH in
exchange for consulting services. The Warrant is exercisable for five years and
the holder is entitled to piggyback registration rights.

         In June 2003 we issued and sold 25,000 shares of our common stock at an
offering price of $1.00 per share to an accredited investor pursuant to Section
4(2) of the Securities Act.

         On June 20, 2003, in exchange for services, we issued Aaron Lehmann
warrants to purchase 50,000 shares of our common stock at an exercise price of
$1.50 per share. These warrants were issued pursuant to Section 4(2) of the
Securities Act.

         On June 20, 2003, in exchange for services, we issued Founders Equity
Securities, Inc. warrants to purchase 100,000 shares of our common stock at an
exercise price of $1.50 per share. These warrants were issued pursuant to
Section 4(2) of the Securities Act.

         On July 2, 2003, in exchange for certain accommodations, we issued
Daryl Strickling warrants to purchase 25,000 shares of our common stock at an
exercise price of $1.50 per share. These warrants were issued pursuant to
Section 4(2) of the Securities Act.




                                       20
<PAGE>

         In January and February 2004 we issued and sold an aggregate of 500,000
shares of our common stock at an offering price of $1.00 per share to three
accredited investors pursuant to Rule 506 promulgated under the Securities Act.

ITEM 6.       MANAGEMENT'S DISCUSSION AND ANALYSIS

         The following discussion and analysis of our financial condition and
results of operations should be read in conjunction with our consolidated
financial statements and related notes appearing elsewhere in this report. This
discussion and analysis contains forward-looking statements that involve risks,
uncertainties, and assumptions. The actual results may differ materially from
those anticipated in these forward-looking statements as a result of certain
factors, including but not limited to the risks discussed in this report.

Overview
--------

         We are a multimedia entertainment company that operates a film
division, a record division and a studio division. During Fiscal 2003, we
derived substantially all of our revenues from the release of our feature film
Snipes. We completed production of Snipes in Fiscal 2002 and released it in
Fiscal 2003 through Charles Street, our co-venture with Sony. Snipes had a
limited theatrical release followed by release of the DVD/VHS of the film. In
addition, through a distribution agreement with New Line Television, Inc.,
Snipes was aired on VH-1, the music television channel. We do not anticipate
generating any significant revenues from Snipes in Fiscal 2004.

         We presently do not have sufficient cash to implement our business
plan. We have experienced this lack of liquidity throughout Fiscal 2003, causing
us to be unable to produce any additional feature films. We believe that we need
to raise or otherwise obtain at least $7,500,000 in additional financing in
order to satisfy our existing obligations and implement our business plan. If we
are successful in obtaining such financing, we may require an additional nine to
twelve months in order to complete production of additional feature films for
release and distribution. Accordingly, in order to generate revenues in Fiscal
2004, we may need to rely on other sources of revenue such as acquiring the
rights to distribute and exploit feature films and other entertainment content
produced by third parties. If we are not successful in obtaining additional
financing, we will not be able to implement our business plan.

History of the Company
----------------------

         We are a Delaware corporation whose common stock is eligible for
quotation on the Over-The-Counter Bulletin Board Trading System under the symbol
"TMEG". From the date of our formation on October 2, 2000 through October 1,
2002, we were engaged in the business of manufacturing mens' and boys'
furnishings. During this period, our name was US Patriot, Inc. and we were a
South Carolina corporation.

         On October 2, 2002, we entered into a Share Exchange Agreement and Plan
of Reorganization with Christopher Schwartz pursuant to which Mr. Schwartz
tendered to us all of the capital stock of Metropolitan, a Pennsylvania
corporation that operates a recording studio in Philadelphia, PA, and also owns
(i) all of the membership interests of Ruffnation Films, a Pennsylvania limited
liability company that operates a film company in Philadelphia, PA, and (ii) all
of the membership interests of Snipes, a Pennsylvania limited liability company
that is the producer of Snipes, the first full length film project of Ruffnation
Films. These securities were tendered to us in exchange for 8,000,000 newly
issued shares of our common stock and 1,000,000 newly issued shares of our
Series A Convertible Preferred Stock. Each share of Series A Convertible
Preferred Stock is convertible by Mr. Schwartz into ten shares of common stock
at any time. Each share of Series A Convertible Preferred Stock is entitled to
10 votes per share and will not be entitled to dividends or interest. The shares
of Series A Convertible Preferred Stock will have a liquidation preference over
shares of our common stock.

         In connection with the share exchange transaction, all of our officers
and directors resigned and Mr. Schwartz was elected as a member of our Board of
Directors. In addition, Mr. Schwartz was appointed as our President and entered
into a five-year employment agreement with us.

         The share exchange transaction was accounted for as a reverse
acquisition. Although we were the legal acquirer in the share exchange
transaction, Metropolitan was the accounting acquirer since its shareholders
acquired a majority ownership interest in our company. Consequently, the
historical financial information included in the financial statements prior to
October 2002 is that of Metropolitan. All significant intercompany transactions
and balances have been eliminated. Pro forma information is not presented as the
share exchange is a recapitalization and not a business combination.





                                       21
<PAGE>

         On November 18, 2002, our stockholders approved a redomestication
merger pursuant to which we were merged with and into TriMedia Entertainment
Group, Inc., a wholly owned subsidiary of US Patriot, Inc. that was incorporated
in the State of Delaware. On November 22, 2002, the redomestication merger was
consummated and we became a Delaware corporation.

         Pursuant to Rule 12g-3(a) under the Exchange Act, we were the successor
issuer to US Patriot, Inc. for reporting purposes under the Exchange Act, and
our common stock is deemed to be registered pursuant to Section 12(g) of the
Exchange Act.

         On December 3, 2002, our trading symbol on the Over-The-Counter
Bulletin Board was changed from "USPA" to "TMEG".

         Due to the fact that Metropolitan has adopted our fiscal year ending on
October 31, our consolidated financial statements include a Consolidated Balance
Sheet dated as of October 31, 2002 and a Consolidated Statement of Operation,
Consolidated Statement of Stockholders' Equity and a Consolidated Statement of
Cash Flows for the ten-month period ended October 31, 2002. Accordingly, the
Results of Operations set forth below compares our operating results for the
twelve-month period ended October 31, 2003 to our operating results for the
ten-month period ended October 31, 2002. Our results of operations for Fiscal
2003 and Fiscal 2002 reflect our current business operations, film and music.

         Please also refer to the information in notes 1 and 2 to the
consolidated financial statements. The following discussion and analysis should
be read in conjunction with the consolidated financial statements and the
related notes thereto included in this Form 10-KSB.

Critical Accounting Policies
----------------------------

         In presenting our financial statements in conformity with accounting
principles generally accepted in the United States, we are required to make
estimates and assumptions that affect the amounts reported therein. Several of
the estimates and assumptions we are required to make relate to matters that are
inherently uncertain as they pertain to future events. However, events that are
outside of our control cannot be predicted and, as such, they cannot be
contemplated in evaluating such estimates and assumptions. If there is a
significant unfavorable change to current conditions, it will likely result in a
material adverse impact to our consolidated results of operations, financial
position and in liquidity. We believe that the estimates and assumptions we used
when preparing our financial statements were the most appropriate at that time.
Presented below are those accounting policies that we believe require subjective
and complex judgments that could potentially affect reported results.

         Revenue Recognition
         -------------------

         We recognize revenue from the sale or licensing of films and
nonrefundable minimum guarantees from customers upon meeting all recognition
requirements of Statement of Position ("SOP") 00-2, "Accounting by Producers or
Distributors of Films". According to SOP 00-2, an entity should recognize
revenue from a sale or licensing arrangement of a film when all of the following
conditions are met:

         o persuasive evidence of a sale or licensing arrangement with a
           customer exists;
         o the film is complete and, in accordance with the terms of the
           arrangement, has been delivered or is available for immediate and
           unconditional delivery;
         o the license period of the arrangement has begun and the customer can
           begin its exploitation, exhibition, or sale;
         o the arrangement fee is fixed or determinable; and
         o collection of the arrangement fee is reasonably assured.

If we do not meet any one of the preceding conditions, then we will defer
recognizing revenue until all of the conditions are met.






                                       22
<PAGE>

         Capitalized Film Costs
         ----------------------

         Costs of making motion picture films that are produced for sale to
third parties are stated at the lower of cost, less accumulated amortization, or
fair value. In accordance with SOP 00-2, we expense film costs based on the
ratio of the current period gross revenues to estimated total gross revenues
from all sources on an individual production basis. As of October 31, 2003, the
only film costs which we had recorded on our balance sheet were incurred in
connection with the production of the movie Snipes. During Fiscal 2003-Second
Quarter, we commenced the amortization of the original $3,694,162 in film costs
associated with the movie Snipes upon distribution of the DVD in February 2003.
We anticipated that these film costs would be fully amortized during Fiscal
2003. Accordingly, the amortization expense related to the film costs associated
with the movie Snipes for the fiscal year ended October 31, 2003 was $3,694,162.
If we estimated that Snipes would have generated more Net Revenues, then we
would have amortized less film costs during the fiscal year ended October 31,
2003 which would have reduced our net loss. We believe that full amortization of
these costs in Fiscal 2003 is appropriate as we currently estimate that is the
period in which we will have generated substantially all of the revenues
associated with the distribution of the DVD. The amortization of film costs
represented substantially all of the direct costs incurred during the fiscal
year ended October 31, 2003.

         Artist Compensation Costs
         -------------------------

         The amount of royalties earned by artists, as adjusted for anticipated
returns, is charged to expense in the period in which the sale of the record
takes place. Advance royalty paid to an artist is reported as an asset only if
the past performance and current popularity of the artist to whom the advance is
made provide a sound basis for estimating that the amount of the advance will be
recoverable from future royalties earned by the artist. Capitalized advances are
charged to expense as subsequent royalties are earned by the artist. Any portion
of capitalized advances that appear not to be fully recoverable from future
royalties to be earned from the artist are charged to expense during the period
in which the loss becomes evident.

Results of Operations
---------------------

Year Ended October 31, 2003 (Fiscal 2003) vs. Ten Months Ended October 31, 2002
(Fiscal 2002)

                                 Fiscal 2003         Fiscal 2002      $Change
                                 -----------         -----------      -------
Net Loss                           $6,586,034           $890,776     $5,695,258
Net Loss From Operations            6,612,954            940,776      5,672,178
Net Revenues                        1,102,060             65,353      1,036,707
Direct Costs                        3,897,664             52,546      3,845,118
Operating Expenses                  3,817,350            953,583      2,863,767
Other Income                           26,920             50,000        <23,080>

         The increase in Net Loss From Operations in Fiscal 2003 was primarily
due to amortization of $3,694,162 of capitalized film costs associated with the
film Snipes, operating expenses related to international travel and business
development, costs related to obtaining and structuring financing activities,
professional fees and consulting fees.

         The increase in Net Revenues in Fiscal 2003 primarily resulted from the
release of Snipes film and DVD, distributions from our Charles Street co-venture
with Sony associated with the sales of the Snipes DVD and $253,986 from the New
Line Television distribution agreement for Snipes. Snipes was released in Fiscal
2003 and we generated substantially all revenue that we expect to generate with
respect to this film in Fiscal 2003. Due to our lack of liquidity throughout
Fiscal 2003, we presently do not have any films that we have produced which we
expect to distribute in Fiscal 2004. Accordingly, we expect a decline in our Net
Revenues for Fiscal 2004.

         The increase in Direct Costs for Fiscal 2003 was mainly the result of
the amortization of $3,694,162 of capitalized film costs associated with the
Snipes film. Direct Costs are costs directly related to the production of film
or music projects that we develop and include such items as production fees and
costs, artist costs and expenses, engineering services, equipment rentals,
amortization expense, studio supplies and support services.

         The increase in Operating Expenses in Fiscal 2003 was primarily due to
an increase of $195,870 in professional fees for legal and accounting expenses
related to general corporate governance and filings with the Securities and
Exchange Commission, an increase of $539,289 in salary expense in Fiscal 2003
reflecting the effect of the commencement of Christopher Schwartz's employment





                                       23
<PAGE>

agreement with us and executive compensation in Fiscal 2003, an increase of
$1,186,222 in consulting expenses because the number of consultants we used
doubled for activities related to domestic and international business
development and general corporate matters, an increase of $422,733 in interest
expense which reflects an increase in debt of $220,000, a full year of interest
expense on debt outstanding from the prior year, a 35% interest rate on $435,000
of term loans, and an increase of $323,556 in travel and entertainment expenses
incurred due to domestic and international business development and financing
activities. Operating Expenses are generally the costs of operating our business
and include salaries, advertising, professional and consulting fees, rent and
utilities and travel.

         Rental Income was $0 in Fiscal 2003 as compared to $50,000 in Fiscal
2002. In Fiscal 2002, this income was due to payments that we received based on
a sublease of a portion of our corporate headquarters. As of November 1, 2002,
we arranged for the sublessee to pay rent directly to the landlord. Accordingly,
in Fiscal 2003, there was no rental income and we do not anticipate any rental
income in future years.

Ten Months Ended October 31, 2002 (Fiscal 2002) vs. Year Ended December 31, 2001
(Fiscal 2001)

                                  Fiscal 2002        Fiscal 2001    $Change
                                  -----------        -----------    -------
Net Loss                           $890,776           $353,156      $537,620
Net Loss From Operations            940,776            355,161       585,615
Net Revenues                         65,353            358,106      <292,753>
Direct Costs                         52,546            246,580      <193,034>
Operating Expenses                  953,583            467,687       485,896
Other Income                         50,000                  0        50,000

         The increase in Net Loss From Operations in Fiscal 2002 was primarily
due to increased operating expenses related to the development, marketing and
production of the film Snipes and professional fees and costs related to merger
and negotiation of the co-venture with Sony.

         The decrease in Net Revenues in Fiscal 2002 primarily resulted from a
$227,742 decrease in Net Revenues from film operations due to a reduction in
work on production of music videos for independent projects while our film
division focused its resources on the production and editing of the film Snipes,
and a reduction in Net Revenues from recording services at our recording studios
due to less rentals of studio time experienced in Fiscal 2002. Snipes was not
released until February 2003 and substantially all of the revenue from this film
was generated in Fiscal 2003.

         The decrease in Direct Costs in Fiscal 2002 was a result of the
decreased production fees and costs and related reductions in artist cost and
expenses related to the decrease in Fiscal 2002 of music video projects. Direct
Costs are costs directly related to the production of film or music projects
that we develop and include such items as production fees and costs, artist
costs and expenses, engineering services, equipment rentals, studio supplies and
support services.

         The increase in Operating Expenses in Fiscal 2002 was primarily due to
an increase of $286,253 in professional fees for legal and accounting expenses
related to the share exchange transaction and negotiation of the Sony
co-venture, an increase of $99,570 in rent and utilities as a result of our
assumption of the lease obligations for the entire corporate headquarters and
related facilities in Fiscal 2002, an increase of $87,753 in salary expense in
Fiscal 2002, and an increase of $49,583 in consulting expenses related to the
share exchange transaction. Operating Expenses are generally the costs of
operating our business and include salaries, advertising, professional and
consulting fees, rent and utilities and travel.

         Rental Income recognized in Fiscal 2002 was due to payments that we
received based on a sublease of a portion of our corporate headquarters. As of
November 1, 2002, we arranged for the sublessee to pay rent to the landlord.
Accordingly, in Fiscal 2003, we did not record Rental Income and our Rent
Expense decreased proportionately.

Changes in Financial Position, Liquidity and Capital Resources

                                        Fiscal 2003    Fiscal 2002     $Change
                                        -----------    -----------   ----------
Cash Flows From Operating Activities    $<252,411>     $<561,695>    $<309,284>
Cash Flows From Investing Activities       19,234              0        19,234
Cash Flows From Financing Activities      219,493        582,759      <363,266>




                                       24
<PAGE>

         The use of cash from operations in Fiscal 2003 was due primarily to our
Net Loss, principally offset by non-cash charges for depreciation and
amortization, amortization of film costs of $3,694,162 and an increase in
accounts payable and accrued expenses of $1,678,570. The use of cash from
operations in Fiscal 2002 was due primarily to our Net Loss and film costs,
partially offset by non-cash charges for depreciation and amortization, interest
expense and an increase in accounts payable and amounts due to affiliates.

         In Fiscal 2003, cash provided by investing activities represented
monies advanced to us by our principal stockholder. In Fiscal 2003, financing
activities provided $61,602 from the issuance of demand notes payable by Snipes
Production, LLC and $157,891 from additional term loans. To the extent we are
unable to complete a significant financing in Fiscal 2004, our survival will
depend on these advances and loans, but there is no assurance that we will be
able to obtain them.

         At October 31, 2003, we had $14,085 in cash. At January 29, 2004, we
had $80,251 in cash. This increase was primarily due to private placement
offerings of our securities that generated $400,000 in gross proceeds. We do not
believe that the amount of cash which we had on hand at January 29, 2004 is
sufficient to fund our operations through January 31, 2005. We have principally
relied on equity financing and loans from our principal stockholders,
distributions from Charles Street, our co-venture with Sony and third party
lenders to fund our operations. During Fiscal 2004, we anticipate continuing to
pursue all possible funding scenarios that will finance our business operations.
We intend to obtain financing to fund our operations for the next twelve months
through sales of our securities and/or a combination of alternative financing
structures including, but not limited to, joint or co-ventures, licensing of
projects, production subsidies, debt financing, tax structured financing, a
merger with or acquisition of a foreign listed entity and partnerships for
individual or multiple projects. We are presently engaged in negotiations of
definitive agreements with two potential sources of financing. However, we are
not certain that these financing transactions will close or whether we will be
able to obtain additional financing. We believe that it will be necessary for us
to raise at least $7,500,000 in order to meet our anticipated cash requirements
through January 31, 2005. There can be no assurances that we will be successful
in our efforts to raise this amount of additional financing. In the event that
we are unable to raise these funds, we will then be required to delay our plans
to grow our business and we will rely on our net revenues to fund our
operations.

         We derived a significant portion of our Net Revenues in Fiscal 2003
from the sale of the feature film Snipes, which was released on DVD/Home Video
by Sony on February 25, 2003. Under the terms of the co-venture agreement with
Sony, Sony advanced funds for manufacturing, marketing, promotion, production,
distribution and other related expenses for film and music projects. These funds
are considered a loan to Charles Street and are recoverable by Sony from the
sales of products released by Charles Street. Substantially all of the
$1,149,584 in Net Revenues which we generated in Fiscal 2003 represented sales
of the feature film Snipes. Through October 31, 2003, Sony has reported gross
billings for Charles Street related to the release of the Snipes DVD/Home Video
of $2,469,147 and net profits of $908,522, of which our portion is $740,019.
Although we may receive additional payments from Charles Street in Fiscal 2004
related to sales of Snipes, there can be no assurance of the amount or timing of
such payments.

         During Fiscal 2003, we negotiated the international licensing rights to
the release of the Snipes DVD and CD soundtrack outside of the United States
with Sony. We may receive net revenues from the television and international
licensing rights during Fiscal 2004. However, there can be no assurance that we
will generate net revenues from any of these arrangements.

         In November 2002, we entered into a distribution agreement with New
Line Television, Inc. for the distribution of the film Snipes via television in
the United States, its territories and Canada. Pursuant to the distribution
agreement we received an advance in the amount of $400,000 in December, 2002. We
recognized $253,986 of revenue from New Line Television, Inc. as of October 31,
2003. Pursuant to the terms of the distribution agreement, New Line Television,
Inc. retains all monies received up to $1,000,000 pursuant to its licensing of
Snipes. To the extent New Line Television, Inc.'s receipts from the licensing of
Snipes exceed $1,000,000, we will receive the net profits after New Line
Television, Inc. recoups all of its cost, fees and expenses with interest.
Accordingly, there can be no assurance that we will receive additional payments
from New Line Television, Inc. under the distribution agreement.

         We have entered into negotiations of agreements with licensors and
distributors of our film and music products both domestically and
internationally. Pursuant to industry standards, the terms and conditions of
these agreements provide for advances against sales of the respective film or
music product that is licensed or distributed. We use the advances for operating
capital needs. However in most cases these advances are recoverable from future
sales of our products. There is no assurance that the advances that we receive
will be recoverable from the sale of respective music or film products licensed
or distributed domestically or internationally. In addition, there is no
assurance that we will receive sufficient advances to adequately fund our
operations.




                                       25
<PAGE>

         We advance funds to artists and, in some cases, to independent
producers pursuant to their respective contracts for acquisition, composition,
marketing, production, development or other related costs. In most cases, these
expenses are recoverable from the artist or independent producer upon the sale
of such party's music or film product. However, there can be no assurance that
the advances or expenses will be recoverable from the artist or producer of a
film or music project. We do not presently have any existing obligations to
advance funds to any artists or independent producers and our ability to do so
in the future is highly dependent on our ability to raise additional financing.

         In addition to the financing that we need to implement our business
plan, we are presently in default on the following obligations:

         We are presently in technical default on a loan in the original
principal amount of $162,000 that Metropolitan, our subsidiary, received from a
bank. The current principal balance of the loan at January 27, 2004 was
$134,643. The loan has a maturity date of August 2006. The loan is payable in
monthly installments of $1,965, including accrued interest at a rate of 8% per
annum, with a lump sum payment due at maturity of $99,858. The loan is
collateralized by all assets of Metropolitan and a personal guarantee by
Christopher Schwartz. The loan agreement includes a provision that states that
any change of ownership of 25% or more of the common stock of Metropolitan
without the prior written consent of the bank is an event of default. The share
exchange transaction resulted in a change in ownership of all of the issued and
outstanding common stock of Metropolitan. Accordingly, Metropolitan is in
technical default of this loan agreement. Upon default, the bank, at its option,
may increase the interest rate four basis points, demand payment in full of the
outstanding principal balance of the loan plus all accrued interest thereon, and
may hold Metropolitan liable for all collection costs that it incurs. Although
the bank has not notified us that it intends to exercise any of these options,
there is no assurance that it will not elect to do so at any point in the
future. As we presently do not have sufficient cash on hand to repay this loan,
if the bank elects to demand repayment, then we may be faced with its election
to sell a sufficient amount of the assets of Metropolitan to raise the funds
necessary to repay this loan. Any such action would have a material adverse
effect on our operations. Since Metropolitan did not receive a waiver from the
bank, the total outstanding amount of this note is reflected as a current
liability in our October 31, 2003 Consolidated Balance Sheet.

         In addition, we have accounts payable and accrued expenses in the
aggregate amount of $2,800,000 which are presently past due.

         We also have other obligations which mature or may mature in the next
twelve months.

         In June 2002, Snipes received a $400,000 loan and issued a promissory
note in the principal amount of $400,000 to third party lenders. The promissory
note is secured by a Copyright Royalty and Security Agreement between the
parties and a second lien security interest in all of Snipes' ownership interest
in the motion picture Snipes. This promissory note matured on December 31, 2002.
On September 27, 2002, Snipes received a $25,000 loan and issued a promissory
note in the principal amount of $25,000 to a third party lender. This promissory
note matured on November 11, 2002. On September 30, 2002, Snipes received a
$10,000 loan and issued a promissory note in the principal amount of $10,000 to
a third party lender. This promissory note matured on November 14, 2002. On
April 11, 2003, Snipes cancelled the $400,000 promissory note, the $25,000
promissory note and the $10,000 promissory note and issued an amended promissory
note in the principal amount of $435,000 to third party lenders. The amended
promissory note accrues interest at the rate of 35% per annum and was due to
mature on October 31, 2003. However, on October 30, 2003 the promissory note was
amended to extend the maturity date from October 31, 2003 until April 30, 2004.

         On March 24, 2003, we received a $12,500 loan and issued a promissory
note to 1025 Investments, Inc. This obligation is documented by a promissory
note payable on demand which accrues interest at the rate of 10% per annum. In
June 2003, we received a short term loan in the aggregate principal amount of
$67,102 from 1025 Investments, Inc. This obligation is documented by a
promissory note payable on demand which bears interest at 12% per annum. In July
2003, we received a short term loan in the aggregate principal amount of $17,000
from 1025 Investments, Inc. The obligation is documented by a promissory note
payable on demand which bears interest at 12% per annum. In August 2003, we
repaid $35,000 of these loans and $61,602 presently remains outstanding.





                                       26
<PAGE>

         We have received loans in the aggregate principal amount of $1,100,000
from Christopher Schwartz, our Chief Executive Officer, sole director and
principal stockholder. These obligations are documented by a demand note payable
which accrues interest at the rate of 7% per annum. In addition, in Fiscal 2003,
Mr. Schwartz, extended short-term loans in an aggregate principal amount of
$520,009 to us and our operating subsidiaries. These obligations have not been
documented and are due on demand. We have repaid $500,775 of these loans and
loans in the principal amount of $19,234 remain outstanding.

         Accordingly, approximately $4,535,000 from the net proceeds of any
additional financing will be used to satisfy our existing loans and obligations
which have matured or will mature in the next twelve months.

         The nature of our business is such that significant cash outlays are
required to produce and acquire films, television programs, music soundtracks
and albums. However, Net Revenues from these projects are earned over an
extended period of time after their completion or acquisition. Accordingly, we
will require a significant amount of cash to fund our present operations and to
continue to grow our business. As our operations grow, our financing
requirements are expected to grow proportionately and we project the continued
use of cash in operating activities for the foreseeable future. Therefore we are
dependent on continued access to external sources of financing. Our current
financing strategy is to sell our equity securities to raise a substantial
amount of our working capital. We also plan to leverage investment in film and
music productions through operating credit facilities, co-ventures and
single-purpose production financing. We plan to obtain financing commitments,
including, in some cases, foreign distribution commitments, to cover, on
average, at least 50% of the budgeted third-party costs of a project before
commencing production. We plan to outsource required services and functions
whenever possible. We plan to use independent contractors and producers,
consultants and professionals to provide those services necessary to operate the
corporate and business operations in an effort to avoid build up of overhead
infrastructures, to maintain a flexible organization and financial structure for
productions and ventures and to be responsive to business opportunities
worldwide. Accordingly, once we raise at least $7,500,000 in additional
financing, we believe that the net proceeds from that financing together with
cash flow from operations, including our share of future film production under
the Charles Street co-venture with Sony, will be available to meet known
operational cash requirements. In addition, we believe that our improved
liquidity position will enable us to qualify for new lines of credit on an
as-needed basis.

         These matters raise substantial doubt about our ability to continue as
a going concern. We will need to raise significant additional funding in order
to satisfy our existing obligations and to fully implement our business plan.
There can be no assurances that such funding will be available on terms
acceptable to us or at all. If we are unable to generate sufficient funds,
particularly at least $7,500,000, then we may be forced to cease or
substantially curtail operations.

         We do not pay and do not intend to pay dividends on our common stock.
We believe it to be in the best interest of our stockholders to invest all
available cash in the expansion of our business.

ITEM 7.       FINANCIAL STATEMENTS

         Our consolidated financial statements for Fiscal Years 2003 and 2002
and footnotes related thereto are included within Item 13(a) of this report and
may be found at pages F-1 through F-20.

ITEM 8.       CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
              FINANCIAL DISCLOSURE

         On November 19, 2002, our Board of Directors approved the dismissal of
Elliott Davis, LLC, the principal accountants previously engaged to audit our
financial statements. The reports provided by Elliott Davis, LLC for US Patriot,
Inc. for the fiscal year ended October 31, 2001 and the period from October 2,
2000 (inception) to October 31, 2000 did not include an adverse opinion or a
disclaimer of opinion, and were not qualified or modified as to uncertainty,
audit scope, or accounting principles. During the fiscal years ended October 31,
2003 and October 31, 2002, and the subsequent period, there were no
disagreements with the former independent auditor on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope or
procedures, which if not resolved to the satisfaction of the former independent
auditor, would have caused it to make reference to the subject matter of the
disagreement in connection with its report.

         On November 19, 2002, our Board of Directors approved the engagement of
Cogen Sklar, LLP as the principal accountants to audit our financial statements.
Prior to such appointment, we had not consulted the newly engaged independent
auditor regarding either the application of accounting principles to a specified
transaction or the type of audit opinion that might be rendered on our financial
statements, nor on any matter that was either the subject of a disagreement or a
reportable event.




                                       27
<PAGE>

ITEM 8A.  CONTROLS AND PROCEDURES

         Evaluation of Disclosure Controls and Procedures
         ------------------------------------------------

         As of October 31, 2003, we carried out an evaluation of the
effectiveness of the design and operation of our "disclosure controls and
procedures" (as defined in the Exchange Act Rules 13a-15(e) and 15d-15(e)) under
the supervision and with the participation of our management, including
Christopher Schwartz, our Chief Executive Officer and Chief Financial Officer.
Based upon that evaluation, Mr. Schwartz concluded that our disclosure controls
and procedures are effective.

         Disclosure controls and procedures are controls and other procedures
that are designed to ensure that information required to be disclosed in our
reports filed or submitted under the Exchange Act are recorded, processed,
summarized and reported, within the time periods specified in the Securities and
Exchange Commission's rules and forms. Disclosure controls and procedures
include, without limitation, controls and procedures designed to ensure that
information required to be disclosed in our reports filed under the Exchange Act
is accumulated and communicated to management to allow timely decisions
regarding required disclosure.

         Changes in Internal Controls
         ----------------------------

         There were no significant changes in our internal controls or, to our
knowledge, in other factors that could significantly affect our disclosure
controls and procedures subsequent to the date we carried out this evaluation.

                                    PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
         COMPLIANCE WITH 16 (a) OF THE EXCHANGE ACT

         The following table sets forth the names, ages and positions of our
directors and executive officers and executive officers of our major operating
subsidiaries as of January 31, 2004.
<TABLE>
<CAPTION>
        Name                           Age     Current Position(s) with Company
        ------------------------       ---     ---------------------------------
        <S>                            <C>     <C>
        Christopher Schwartz           43      Chief Executive Officer, President, Treasurer
                                               and Director

        Richard Murray                 45      President of Ruffnation Films LLC

        Ernest J. Cimadamore           42      Secretary, President of Ruffnation Music, Inc.
</TABLE>
All directors serve until their successors are duly elected and qualified.
Vacancies in the Board of Directors are filled by majority vote of the remaining
directors. The executive officers are elected by, and serve at the discretion of
the Board of Directors.

         A brief description of the business experience during the past five
years of our director, our executive officers and our key employees is as
follows:

         Christopher Schwartz, Chairman and CEO - Mr. Schwartz was elected as a
member of our Board of Directors and was appointed as our Chief Executive
Officer in October 2002. Mr. Schwartz began in the music field as a performer
and started his experience in the record industry as a promoter of musical
talent for clients such as Priority and Island Records. He is credited as one of
the first record industry executives to 'crossover' hip-hop to mainstream pop
with the artist Schooly D. In 1989, he and his partners formed Ruffhouse Records
with a production and distribution deal with Columbia Records, a division of
Sony. As CEO of Ruffhouse, he achieved international fame, with multimillion
unit album sales, Billboard charting topping acts and success of groups such as
Cyprus Hill, Kriss Kross and The Fugees. The Fugees are credited by the
Recording Industry Association of America with the biggest selling hip-hop album
of all time by a group. He is also credited with discovering and producing the





                                       28
<PAGE>

multi-Grammy award winning artist Lauryn Hill. In 1999, Ruffhouse was sold to
Sony and Mr. Schwartz formed Ruffworld Entertainment Group. As Founder and CEO
of Ruffworld Entertainment, Mr. Schwartz' vision of a multimedia entertainment
company developing music and film with musical content was born. Through its
recording division, Ruffworld Entertainment established a joint venture record
label with Warner Brothers. Its film division recently completed the DVD film,
Snipes, starring Nelly, a Grammy award winning hip-hop artist with over 17
million album sales. Mr. Schwartz has developed, produced or discovered artists
that have achieved over 100 million unit sales and approximately $1 billion in
sales over his career to date. As a leader in the music industry, he has been
recognized by Forbes, The Wall Street Journal, The New York Times, CNN, CNBC and
industry publications such as Billboard, Vibe, Hits, Rolling Stone, The
Hollywood Reporter and The Source.

         Richard Murray, President of Ruffnation Film LLC - Mr. Murray is
responsible for overseeing our film operations. Recently Mr. Murray wrote,
produced and directed his first feature film, Snipes, which has been released
through Ruffnation Films co-venture with Sony. He has over 15 years experience
as a director, writer and producer of film related products and services. He has
directed and produced over 100 music videos for such star artists as Kriss
Kross, Spin Doctors, The Fugees, Arrested Development, Monica, and Jeff Healy.
With such a diverse list of credits, he is perhaps the only director who has had
a #1 video in four different genres of popular music. During his 15-year career
as a music video director, he has earned a reputation for his ability to define
the essence of whatever type of music and artist he has worked with. After
graduating from Temple University with a B.A. in Communications in 1984, Mr.
Murray began his professional career by directing some of the earliest rap
videos for hip-hop legends Schooly D and Roxanne Shante.

         Ernest J. Cimadamore, President of Ruffnation Music, Inc.- Mr.
Cimadamore is responsible for our music operations and administration. He has 20
years of experience in the music industry. From 1981 to 1987, Mr. Cimadamore was
Senior Vice President of Philly World Records that was distributed by Atlantic
Records, a division of Time Warner. He joined Alpha International Records as a
Senior Vice President in 1987. Alpha International was a division of a public
company which had a distribution agreement through Polygram Records. He also
founded and operated his own marketing company. In a two-year period, the
company was responsible for 25 gold and platinum artist projects for numerous
major record companies, including Atlantic, Elektra, Sony, Warner Bros. and
Island. The company worked with artists that included Kurupt, Anita Baker,
Levert, Keith Sweat, and The Whispers. Over his 20 years in the music industry
he has successfully worked in the areas of operations, distribution, promotion,
sales and marketing. During the period from 1991 to 2002, Mr. Cimadamore served
as a corporate officer for Clariti Telecommunications International, Ltd., a
public company based in Philadelphia, Pennsylvania.

         There are no family relationships among any of our directors or
executive officers.

         Compliance with Section 16(a) of the Exchange Act

         Section 16(a) of the Securities Exchange Act requires our directors,
executive officers and persons who are the beneficial owners of more than ten
percent of our common stock (collectively, the "Reporting Persons") to file
reports of ownership and changes in ownership with the Securities and Exchange
Commission and to furnish us with copies of these reports.

         Prior to October 2, 2002, the date of the Share Exchange Agreement, we
do not believe that any of the prior Reporting Persons made filings required by
Section 16(a) of the Securities Exchange Act. In Fiscal 2003, Christopher
Schwartz was deficient in filing a Form 4 required by Section 16(a) of the
Securities Exchange Act relating to the grant of options to purchase 5,786,707
shares of our common stock pursuant to the terms of his employment agreement
with us. In Fiscal 2003, Ernest Cimadamore was deficient in filing a Form 3
required by Section 16(a) of the Securities Exchange Act relating to his receipt
of 450,000 shares of our common stock.

         Code of Ethics

         We have not adopted a code of ethics that applies to our principal
executive officer, principal financial officer, principal accounting officer,
controller or persons performing similar functions. As Christopher Schwartz is
our majority stockholder, sole member of the Board of Directors, President,
Chief Executive Officer and Chief Financial Officer, we do not believe that a
formal written Code of Ethics is necessary to regulate Mr. Schwartz's conduct.
However, upon raising additional capital financing necessary to hire additional
executive officers we intend to adopt a code of ethics applicable to our
executive officers.





                                       29
<PAGE>

ITEM 10. EXECUTIVE COMPENSATION

         The following table sets forth compensation paid or accrued during the
fiscal year ended October 31, 2003 ("Fiscal 2003") and the fiscal year ended
October 31, 2002 ("Fiscal 2002") to the our Chief Executive Officer and the most
highly compensated executive officers whose total annual salary and bonus
exceeded $100,000 during such fiscal year (collectively, the "Named
Executives").

                           SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
                                                                                                        Long-Term
                                                                           Annual Compensation      Compensation Awards
                                                                     ---------------------------    -------------------
                                                          Fiscal Year                                              Number of
Name and Principal Position                                  Ended           Salary(1)          Bonus               Options
----------------------------                           ----------------      --------          --------          ----------
<S>                                                    <C>                   <C>               <C>               <C>
Christopher Schwartz                                   October 31, 2003      $302,500          $      0                  0
Chief Executive Officer, President, Treasurer          October 31, 2002      $      0          $      0          5,786,707


Richard Murray                                         October 31,2003        151,250                 0                  0
President of Ruffnation Films LLC                      October 31, 2002      $      0          $      0                  0

Ernest J. Cimadamore                                   October 31, 2003       201,667                 0                  0
President of Ruffnation Music, Inc.                    October 31, 2002      $      0          $      0                  0
</TABLE>
--------------
(1) Substantially all amounts represent accrued expenses as of the date of this
    report.

         Option Grants For the Fiscal Year Ended  October 31, 2003
         ---------------------------------------------------------

         We did not grant any stock options during Fiscal 2003. No options were
exercised by any of our executive officers in Fiscal 2003.

         The following table sets forth information concerning year-end option
values for Fiscal 2003 for the executive officers named in our Summary
Compensation Table above. The value of unexercised in-the-money options is
calculated based on the closing bid price of our common stock on October 31,
2003 of $1.01.

                                           Fiscal Year End Option Values
<TABLE>
<CAPTION>
                                                                                Value of Unexercised
                          Number of Unexercised Options                           In-the-Money Options
                              at Fiscal Year End                                   at Fiscal Year End
-------------------------------------------------------------------          ------------------------------------
       Name                      Exercisable          Unexercisable          Exercisable           Unexercisable
---------------------            -----------          -------------          -----------           --------------
<S>                              <C>                  <C>                    <C>                   <C>
Christopher Schwartz             1,575,000(1)           4,211,707                $0                     $0
</TABLE>
--------------
(1)  Consists of options to purchase 750,000 shares of our common stock at an
     exercise price of $1.50 per share and options to purchase 825,000 shares of
     common stock at an exercise price of $1.09 per share.

         Long Term Incentive Plans
         -------------------------

         We currently do not have any long-term incentive plans.

         Compensation of Directors
         -------------------------

         Our director is not compensated for any services provided as a
director.





                                       30
<PAGE>

         Employment Agreements
         ---------------------

         On October 9, 2002, we entered into a five-year Employment Agreement
with Christopher Schwartz. Pursuant to the terms of the Employment Agreement,
Christopher Schwartz is our Chief Executive Officer and shall be a member of our
Board of Directors. Mr. Schwartz is entitled to receive an annual base salary of
$300,000 and is eligible to receive bonus compensation at the discretion of the
Board of Directors if certain milestones are met. Pursuant to the Employment
Agreement, Mr. Schwartz is entitled to receive fringe benefits including paid
vacation, medical insurance, participation in pension, profit sharing and stock
plans, reimbursement for expenses and life insurance. Mr. Schwartz is also
entitled to receive options to purchase 5,786,707 shares of our common stock. If
we terminate the employment of Mr. Schwartz without cause, due to a long-term
disability, or as a result of his death or if Mr. Schwartz terminates his
employment for good reason, as such terms are defined in the employment
agreement, then his right to exercise his stock options shall be accelerated and
all unvested options shall immediately vest. In addition, if we experience a
merger, acquisition, sale of our assets or similar transaction in which we are
not the surviving corporation, then all unvested options will immediately vest
unless such options are assumed by the surviving corporation.

         Repricing of Options
         --------------------

         We have not adjusted or amended the exercise price of any stock
options.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
         RELATED STOCKHOLDER MATTERS

         The following table sets forth, as of January 26, 2004, certain
information with respect to beneficial ownership of our common stock as of
January 26, 2004 by:

o each person known to us to be the beneficial owner of more than 5% of our
common stock; o each of our directors; o each of our executive officers; and o
all of our executive officers and directors as a group.

Unless otherwise specified, we believe that all persons listed in the table
possess sole voting and investment power with respect to all shares of our
common stock beneficially owned by them. As of January 26, 2004, 26,692,788
shares of our common stock were issued and outstanding.
<TABLE>
<CAPTION>
                                                         Amount and Nature of
Name and Address                                        Beneficial Ownership(1)              Percent of Class
----------------                                        -----------------------              ----------------
<S>                                                     <C>                                  <C>
Christopher Schwartz (2)(3)                                   19,575,000                              51.9
101 Charles Drive
Bryn Mawr, PA 19019

Ernest Cimadamore (4)                                           450,000                                1.7
101 Charles Drive
Bryn Mawr, PA 19019

Richard Murray (5)                                                 0                                   *
101 Charles Drive
Bryn Mawr, PA 19019

All directors and executive officers as a group               20,025,000                              52.3
(3 people)(3)
</TABLE>
----------------
* Less than one percent.
(1)  Beneficial ownership has been determined in accordance with Rule 13d-3
     under the Securities Exchange Act of 1934. Unless otherwise noted, we
     believe that all persons named in the table have sole voting and investment
     power with respect to all shares of common stock beneficially owned by
     them.
(2)  Sole Director, Chief Executive Officer and President. Includes the amount
     held in escrow for Christopher Schwartz by Erskine, Wolfson & Gibbon.



                                       31
<PAGE>

(3)  Also includes 10,000,000 shares of common stock issuable upon conversion of
     1,000,000 shares of Series A Convertible Preferred Stock and 1,575,000
     shares of common stock which are issuable upon exercise of vested stock
     options held by Mr. Schwartz.
(4)  President of Ruffnation Music, Inc. (5) President of Ruffnation Films LLC.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

         We have received loans in the aggregate principal amount of $1,100,000
from Christopher Schwartz, our Chief Executive Officer, sole director and
principal stockholder. These obligations are documented by a demand note payable
which accrues interest at the rate of 7% per annum. In addition, in Fiscal 2003,
Mr. Schwartz, extended short-term loans in an aggregate principal amount of
$520,009 to us and our operating subsidiaries. These obligations have not been
documented and are due on demand. We have repaid $500,775 of these loans and
loans in the principal amount of $19,234 remain outstanding.

         Metropolitan subleases our corporate headquarters located at 101
Charles Drive, Bryn Mawr, Pennsylvania 19010 from an affiliated company owned by
Mr. Schwartz. The affiliated company is obligated to pay the landlord rent of
$15,000 per month of which Metropolitan pays $10,000 per month.

ITEM 13. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

      (a) The following Exhibits are filed as part of this report.

 Exhibit
 Number    Description
 ------    -----------
   2.1     Share Exchange Agreement and Plan of Reorganization dated as
           of October 2, 2002 by and among US Patriot, Inc. and
           Christopher Schwartz (incorporated by reference to Exhibit
           1.1 of Current Report on Form 8-K filed on October 18, 2002).

   2.2     Agreement and Plan of Merger between US Patriot, Inc. and TriMedia
           Entertainment Group, Inc. (incorporated by reference to Exhibit 3.4
           of Current Report on Form 8-K filed on December 2, 2002).

   2.3     Articles of Merger as filed in the State of South Carolina
           (incorporated by reference to Exhibit 2.1 of Current Report on Form
           8-K filed on December 2, 2002).

   2.4     Certificate of Merger as filed in the State of Delaware (incorporated
           by reference to Exhibit 3.5 of Current Report on Form 8-K filed on
           December 2, 2002).

   3.1     Certificate of Incorporation of TriMedia Entertainment Group, Inc.
           (incorporated by reference to Exhibit 3.1 of Current Report on Form
           8-K filed on December 2, 2002).

   3.2     Certificate of Amendment of Certificate of Incorporation Before
           Payment of Capital of TriMedia Entertainment Group, Inc.
           (incorporated by reference to Exhibit 3.2 of Current Report on Form
           8-K filed on December 2, 2002).

   3.3     By-laws of TriMedia Entertainment Group, Inc. (incorporated by
           reference to Exhibit 3.3 of Current Report on Form 8-K filed on
           December 2, 2002).

   4.1     Specimen Stock Certificate (incorporated by reference to
           Exhibit 4.1 to the Annual Report on Form 10-KSB for the
           fiscal year ended October 31, 2002 filed on March 17, 2003).

   4.2     Certificate of Designations of Series A Convertible Preferred
           Stock of US Patriot, Inc. (incorporated by reference to
           Exhibit 4.2 to the Annual Report on Form 10-KSB for the
           fiscal year ended October 31, 2002 filed on March 17, 2003).

  10.1     Employment Agreement dated as of October 9, 2002 by and
           between US Patriot, Inc. and Christopher Schwartz
           (incorporated by reference to Exhibit 10.1 to the Annual
           Report on Form 10-KSB for the fiscal year ended October 31,
           2002 filed on March 17, 2003).

  10.2     Co-Venture Agreement between Sony Music, a Group of Sony
           Music Entertainment, Inc., Ruffnation Films, LLC and
           Christopher Schwartz dated as of September 20, 2002
           (incorporated by reference to Exhibit 10.2 to the Annual
           Report on Form 10-KSB for the fiscal year ended October 31,
           2002 filed on March 17, 2003).




                                       32
<PAGE>
 Exhibit
 Number    Description
 ------    -----------
   10.3    Loan Agreement by and between TriMedia Entertainment Group, Inc. and
           Gemini Growth Fund, LP dated as of November 1, 2002 (incorporated by
           reference to Exhibit 10.3 to the Annual Report on Form 10-KSB for the
           fiscal year ended October 31, 2002 filed on March 17, 2003).

   10.4    14% Secured Convertible Promissory Note in the principal amount of
           $250,000 issued to Gemini Growth Fund, LP dated November 1, 2002
           (incorporated by reference to Exhibit 10.4 to the Annual Report on
           Form 10-KSB for the fiscal year ended October 31, 2002 filed on March
           17, 2003).

   10.5    Subordination Agreement by and among TriMedia Entertainment Group,
           Inc., Christopher Schwartz, SPH Investments, Inc., Capital Growth
           Trust, HMA Investment Profit Sharing Plan, Continental Southern
           Resources, Inc. and Gemini Growth Fund, LP dated as of November 1,
           2002 (incorporated by reference to Exhibit 10.5 to the Annual Report
           on Form 10-KSB for the fiscal year ended October 31, 2002 filed on
           March 17, 2003).

   10.6    Guaranty by US Patriot, Inc. in favor of Gemini Growth Fund, LP dated
           as of November 1, 2002 (incorporated by reference to Exhibit 10.6 to
           the Annual Report on Form 10-KSB for the fiscal year ended October
           31, 2002 filed on March 17, 2003).

   10.7    Security Agreement issued by TriMedia Entertainment Group, Inc. to
           Gemini Growth Fund, LP dated November 1, 2002 (incorporated by
           reference to Exhibit 10.7 to the Annual Report on Form 10-KSB for the
           fiscal year ended October 31, 2002 filed on March 17, 2003).

   10.8    Warrants to purchase 62,500 shares of common stock issued to Gemini
           Growth Fund, LP dated November 1, 2002 (incorporated by reference to
           Exhibit 10.8 to the Annual Report on Form 10-KSB for the fiscal year
           ended October 31, 2002 filed on March 17, 2003).

   10.9    Copyright and Royalty Security Agreement dated June 27, 2002 by and
           between Snipes Productions, LLC and International Travel CD's, Inc.
           dated June 27, 2002 (incorporated by reference to Exhibit 10.9 to the
           Annual Report on Form 10-KSB for the fiscal year ended October 31,
           2002 filed on March 17, 2003).

  10.10    Assignment and Release Agreement dated October 5, 2002 between
           International Travel CD's, Inc., SPH Investments, Inc., Capital
           Growth Trust, HMA Investments Profit Sharing Plan, Inc. and
           Continental Southern Resources, Inc. relating to the promissory notes
           in the aggregate principal amount of $435,000 by Snipes Productions,
           LLC issued to International Travel CD's, Inc. and the Copyright and
           Security Agreement (incorporated by reference to Annual Report to
           Exhibit 10.10 to the security holders for the fiscal year ended
           October 31, 2002 filed on March 17, 2003).

  10.11    Intercreditor Agreement by and between Christopher Schwartz and each
           of Capital Growth Trust, SPH Investments, Inc., HMA Investments
           Profit Sharing Plan and Continental Southern Resources, Inc. dated
           October 25, 2002 (incorporated by reference to Exhibit 10.11 to the
           Annual Report on Form 10-KSB for the fiscal year ended October 31,
           2002 filed on March 17, 2003).

  10.12    Stock Purchase Warrant to purchase 33,400 shares of common stock
           issued to Frank Eiffe dated November 14, 2002 (incorporated by
           reference to Exhibit 10.12 to the Annual Report on Form 10-KSB for
           the fiscal year ended October 31, 2002 filed on March 17, 2003).

  10.13    Stock Purchase Warrant to purchase 66,600 shares of common stock
           issued to Dr. Wolfgang Moelzer dated November 14, 2002 (incorporated
           by reference to Exhibit 10.13 to the Annual Report on Form 10-KSB for
           the fiscal year ended October 31, 2002 filed on March 17, 2003).

  10.14    Stock Purchase Warrant to purchase 50,000 shares of common stock
           issued to BKB Boston K Borg Management GmbH dated December 12, 2002
           (incorporated by reference to Exhibit 10.14 to the Annual Report on
           Form 10-KSB for the fiscal year ended October 31, 2002 filed on March
           17, 2003).

  10.15    7% Demand Promissory Note in the principal amount of $1,100,000 by
           Ruffnation Films LLC issued to Christopher Schwartz dated May 1, 2002
           (incorporated by reference to Exhibit 10.15 to the Annual Report on
           Form 10-KSB for the fiscal year ended October 31, 2002 filed on March
           17, 2003).

  10.16    Security Agreement issued by Ruffnation Films LLC, Snipes Productions
           LLC and Metropolitan Recording Inc. to Christopher Schwartz dated May
           1, 2002 (incorporated by reference to Exhibit 10.16 to the Annual
           Report on Form 10-KSB for the fiscal year ended October 31, 2002
           filed on March 17, 2003).

  10.17    8% Promissory Note in the principal amount of $162,000 by
           Metropolitan Recording Inc. issued to Founders Bank dated August 21,
           2001 (incorporated by reference to Exhibit 10.17 to the Annual Report
           on Form 10-KSB for the fiscal year ended October 31, 2002 filed on
           March 17, 2003).




                                       33
<PAGE>

 Exhibit
 Number    Description
 ------    -----------
  10.18    Security Agreement issued by Metropolitan Recording Inc. to Founders
           Bank dated August 21, 2001 (incorporated by reference to Exhibit
           10.18 to the Annual Report on Form 10-KSB for the fiscal year ended
           October 31, 2002 filed on March 17, 2003).

  10.19    Loan Agreement between Metropolitan Recording, Inc. and Founders Bank
           dated August 21, 2001 (incorporated by reference to Exhibit 10.19 to
           the Annual Report on Form 10-KSB for the fiscal year ended October
           31, 2002 filed on March 17, 2003).

  10.20    10% Demand Promissory Note in the principal amount of $12,500 issued
           to 1025 Investments, Inc. dated March 24, 2003 (incorporated by
           reference to Exhibit 10.1 of the Quarterly Report on Form 10-QSB
           filed on June 18, 2003).

  10.21    Warrants to purchase 10,000 shares of common stock issued to Trident
           Growth Fund, L.P. dated March 27, 2003 (incorporated by reference to
           Exhibit 10.2 of the Quarterly Report on Form 10-QSB filed on June 18,
           2003).

  10.22    35% Secured Promissory Note in the principal amount of $435,000
           issued by Snipes Productions, LLC to SPH Investments, Inc., Capital
           Growth trust, HMA Investment Profit Sharing Plan and Continental
           Southern Resources, Inc. dated June 27, 2002 as amended through April
           11, 2003 (incorporated by reference to Exhibit 10.3 of the Quarterly
           Report on Form 10-QSB filed on June 18, 2003).

  10.23    Warrants to purchase 100,000 shares of common stock issued to Trident
           Growth Fund, L.P. dated June 13, 2003 (incorporated by reference to
           Exhibit 10.1 of the Quarterly Report on Form 10-QSB filed on
           September 17, 2003).

  10.24    12% Demand Promissory Note in the principal amount of $67,102 issued
           to 1025 Investments, Inc. dated June 19, 2003 (incorporated by
           reference to Exhibit 10.2 of the Quarterly Report on Form 10-QSB
           filed on September 17, 2003).

  10.25    Warrants to purchase 50,000 shares of common stock issued to Aaron
           Lehmann dated June 20, 2003 (incorporated by reference to Exhibit
           10.3 of the Quarterly Report on Form 10-QSB filed on September 17,
           2003).

  10.26    Warrants to purchase 100,000 shares of common stock issued to
           Founders Equity Securities, Inc. dated June 20, 2003 (incorporated by
           reference to Exhibit 10.4 of the Quarterly Report on Form 10-QSB
           filed on September 17, 2003).

  10.27    Warrants to purchase 25,000 shares of common stock issued to Daryl
           Strickling dated July 2, 2003 (incorporated by reference to Exhibit
           10.5 of the Quarterly Report on Form 10-QSB filed on September 17,
           2003).

  10.28    12% Demand Promissory Note in the principal amount of $17,000 issued
           to 1025 Investments, Inc. dated July 25, 2003 (incorporated by
           reference to Exhibit 10.6 of the Quarterly Report on Form 10-QSB
           filed on September 17, 2003).

  10.29    Distribution Agreement between New Line Television, Inc. and
           Ruffnation Films LLC dated November 26, 2002 (incorporated by
           reference to Exhibit 10.7 of the Quarterly Report on Form 10-QSB
           filed on September 17, 2003).

  10.30    Amendment to Co-Venture Agreement between Sony Music, a Group of Sony
           Music Entertainment, Inc., Ruffnation Films, LLC and Christopher
           Schwartz dated as of October 2, 2003.

  10.31    35% Secured Promissory Note in the principal amount of $435,000
           issued by Snipes Productions, LLC to SPH Investments, Inc., Capital
           Growth Trust, HMA Investment Profit Sharing Plan and Continental
           Southern Resources, Inc. dated June 27, 2002 as amended through April
           11, 2003 and October 30, 2003.

  10.32    Warrants to purchase 10,000 shares of common stock issued to Trident
           Growth Fund, L.P. dated September 11, 2003.

     16    Letter on change in certifying accountant from Elliot Davis, LLC
           (incorporated by reference to Exhibit 16.1 of Current Report on Form
           8-K filed November 25, 2002).

     21    Subsidiaries of TriMedia Entertainment Group, Inc.

   31.1    Certification dated February 13, 2004 pursuant to Exchange Act Rule
           13a-14(a) or 15d-14(a) of the Principal Executive Officer and the
           Principal Financial Officer as adopted pursuant to Section 302 of the
           Sarbanes-Oxley Act of 2002 by Christopher Schwartz, Chief Executive
           Officer and Chief Financial Officer.


                                       34
<PAGE>

 Exhibit
 Number    Description
 ------    -----------
  32.1     Certification dated February13, 2004 pursuant to 18 U.S.C. Section
           1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
           2002 made by Christopher Schwartz, Chief Executive Officer and Chief
           Financial Officer.

         (b) On November 6, 2003 we filed a current Report on Form 8-K reporting
that on October 30, 2003, we entered into a letter agreement with third party
lenders to amend that certain 35% secured promissory note dated June 27, 2002,
as amended through August 11, 2003. The amendment to the secured promissory note
extends the maturity date for an additional six months from October 31, 2003 to
April 30, 2004. All other terms and conditions of the secured promissory note
remain in full force and effect.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

         We completed a share exchange transaction on October 2, 2002. In
connection with the share exchange, all of our officers and directors resigned
and Christopher Schwartz was elected to our Board of Directors and was appointed
our President and Chief Executive Officer. As described in Item 8 of this Annual
Report on Form 10-KSB, on November 19, 2002, our new management engaged a new
principal accountant to audit our financial statements for Fiscal 2001 and
Fiscal 2002. Accordingly, the following information presented for Fiscal 2003
represents services provided by Cogen Sklar, LLP, our present principal
accountants and the information presented for Fiscal 2002 represents fees paid
for services provided by both Cogen Sklar, LLP and Elliott Davis, LLC, our
former principal accountants.

         Audit Fees
         ----------

         During Fiscal 2003, the aggregate fees billed for professional services
rendered by our principal accountant for the audit of our annual financial
statements and review of our quarterly financial statements was $33,500. During
Fiscal 2002, the aggregate fees billed for professional services rendered by our
principal accountant for the audit of our financial statements for the years
ended December 31, 2000 and 2001 and the ten months ended October 31, 2002 was
$92,038.

         Audit-Related Fees
         ------------------

         During Fiscal 2003, our principal accountant did not render assurance
and related services reasonably related to the performance of the audit or
review of financial statements. During Fiscal 2002, the aggregate fees billed
for professional services rendered by our principal accountant for the audit of
our annual financial statements and review of our quarterly financial statements
was $8,950. These services consisted of consulting fees related to the review of
US Patriot, Inc.'s SB-2 registration statement and the sale of US Patriot, Inc.
to our present management pursuant to the share exchange transaction.

         Tax Fees
         --------

         During Fiscal 2003, our principal accountant did not render services to
us for tax compliance, tax advice and tax planning. During Fiscal 2002, the
aggregate fees billed for professional services rendered by our principal
accountant for tax compliance, tax advice and tax planning were $1,250. These
services consisted of tax planning for the sale of US Patriot, Inc. to our
present management pursuant to the share exchange transaction.

         All Other Fees
         --------------

         During Fiscal 2003, there were no fees billed for products and services
provided by the principal accountant other than those set forth above. During
Fiscal 2002, there were no fees billed for products and services provided by the
principal accountant other than those set forth above.

         Audit Committee Approval
         ------------------------

         We do not presently have an audit committee. All of the services listed
above were approved by Christopher Schwartz, our Chief Executive Officer and
sole director.




                                       35
<PAGE>








                       TRIMEDIA ENTERTAINMENT GROUP, INC.

                                AND SUBSIDIARIES

                        CONSOLIDATED FINANCIAL STATEMENTS

                      OCTOBER 31, 2003 AND OCTOBER 31, 2002


<PAGE>


               TRIMEDIA ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES










                                 C O N T E N T S
                                 ---------------

INDEPENDENT AUDITORS' REPORT                                                 F-1

CONSOLIDATED BALANCE SHEETS                                                  F-2

CONSOLIDATED STATEMENTS OF OPERATIONS                                        F-3

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY                               F-4

CONSOLIDATED STATEMENTS OF CASH FLOWS                                  F-5 - F-6

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                            F-7 - F-19







<PAGE>

                          INDEPENDENT AUDITORS' REPORT



To the Board of Directors
Trimedia Entertainment Group, Inc.
  and Subsidiaries
Bryn Mawr, Pennsylvania

We have audited the consolidated balance sheets of Trimedia Entertainment Group,
Inc. and Subsidiaries as of October 31, 2003 and October 31, 2002 and the
related consolidated statements of operations, stockholders' equity (deficit)
and cash flows for the year ended October 31, 2003 and the ten months ended
October 31, 2002. These consolidated financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these consolidated financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Trimedia Entertainment Group, Inc. and Subsidiaries as of October 31, 2003 and
October 31, 2002 and the results of their consolidated operations and cash flows
for the year ended October 31, 2003 and the ten months ended October 31, 2002,
in conformity with accounting principles generally accepted in the United
States.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 3 to the
financial statements, the Company has suffered recurring losses from operations,
has negative working capital of $3,447,584 at October 31, 2003 and experienced
negative cash flow from operations of $252,411 and $561,695 for the year ended
October 31, 2003 and the ten months ended October 31, 2002, all of which raises
substantial doubt about its ability to continue as a going concern. Management's
plans in regard to this matter are also described in Note 3. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.




                                                 COGEN SKLAR, LLP


Bala Cynwyd, Pennsylvania
January 23, 2004

                                       F-1

<PAGE>

               TRIMEDIA ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                      OCTOBER 31, 2003 AND OCTOBER 31, 2002



<TABLE>
<CAPTION>
                                                                               2003                  2002
                                                                            ----------            ----------
     ASSETS
<S>                                                                        <C>                     <C>
CURRENT ASSETS
  Cash                                                                      $   14,085            $   27,769
  Accounts receivable                                                                -                13,500
  Prepaid expenses                                                              22,287                     -
                                                                            ----------            ----------
                                                                                36,372                41,269

PROPERTY AND EQUIPMENT - Net                                                 1,318,237             1,507,135

FILM COSTS                                                                           -             3,657,037

OTHER ASSETS                                                                       200                   200
                                                                            ----------            ----------

TOTAL ASSETS                                                                $1,354,809            $5,205,641
                                                                            ==========            ==========

        LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)

CURRENT LIABILITIES
  Term loans                                                                $  741,164            $  148,273
  Demand note payable                                                           61,602               435,000
  Accounts payable and accrued expenses                                      2,509,150               830,580
  Taxes payable                                                                 17,501                 1,501
  Advance from Sony                                                            135,305                     -
  Due to stockholder                                                            19,234                     -
                                                                            ----------            ----------
                                                                             3,483,956             1,415,354

LOAN PAYABLE - STOCKHOLDER                                                   1,100,000             1,100,000
                                                                            ----------            ----------

TOTAL LIABILITIES                                                            4,583,956             2,515,354
                                                                            ----------            ----------

        STOCKHOLDERS' EQUITY (DEFICIT)

  Common stock subscribed                                                            -                25,000
  Preferred stock, $0.0001 par value; 20,000,000 shares
    authorized; 1,000,000 issued and outstanding                                   100                   100
  Common stock, $0.0001 par value; 100,000,000 shares
    authorized; 26,124,000 and 25,999,000 shares
    issued and outstanding in 2003 and 2002                                      2,612                 2,599
  Additional paid-in capital                                                 4,809,488             4,117,901
  Accumulated deficit                                                       (8,041,347)           (1,455,313)
                                                                            ----------            ----------

TOTAL STOCKHOLDERS' EQUITY (DEFICIT)                                        (3,229,147)            2,690,287
                                                                            ----------            ----------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)                        $1,354,809            $5,205,641
                                                                            ==========            ==========
</TABLE>


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

                                      F-2

<PAGE>


               TRIMEDIA ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                           YEAR ENDED OCTOBER 31, 2003
                      AND TEN MONTHS ENDED OCTOBER 31, 2002



<TABLE>
<CAPTION>
                                                                  2003                  2002
                                                               ----------            ----------
<S>                                                           <C>                     <C>
NET REVENUE                                                    $1,102,060            $   65,353


DIRECT COSTS                                                    3,897,664                52,546
                                                               ----------            ----------


GROSS PROFIT (LOSS)                                            (2,795,604)               12,807


OPERATING EXPENSES                                              3,817,350               953,583
                                                               ----------            ----------


LOSS FROM OPERATIONS                                            6,612,954               940,776


OTHER INCOME                                                       26,920                50,000
                                                               ----------            ----------


NET LOSS                                                       $6,586,034            $  890,776
                                                               ==========            ==========


BASIC AND DILUTED LOSS PER SHARE                               $     0.25            $     0.03
                                                               ==========            ==========


WEIGHTED AVERAGE NUMBER OF SHARES                              26,063,584            25,999,000
                                                               ==========            ==========
</TABLE>



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

                                       F-3
<PAGE>

               TRIMEDIA ENTERTAINMENT GROUP, INC.AND SUBSIDIARIES
            CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
               FOR THE PERIOD JANUARY 1, 2002 TO OCTOBER 31, 2003



<TABLE>
<CAPTION>
                                                            Common
                                                             Stock       Preferred      Common
                                                            Subscribed     Stock         Stock
                                                            ----------   ---------      -------
<S>                                                         <C>          <C>             <C>
BALANCE AT JANUARY 1, 2002                                   $     -       $ 100        $ 2,599

Reverse acquisition:
  Conversion of loan payable - stockholder/member                  -           -              -
  Conversion of due to affiliates                                  -           -              -

Accrued interest contributed as capital                            -           -              -

Common stock subscribed                                       25,000           -              -

Net loss for the ten months ended
  October 31, 2002                                                 -           -              -
                                                             -------       -----        -------

BALANCE AT OCTOBER 31, 2002                                  $25,000       $ 100        $ 2,599

Issuance of common stock subscribed                          (25,000)          -              3

Issuance of common stock for services                              -           -             10

Issuance of warrants for services                                  -           -              -

Issuance of warrants for financing fees                            -           -              -

Issuance of warrants for deferred loan costs                       -           -              -

Net loss for the year ended October 31, 2003                       -           -              -
                                                             -------       -----        -------

BALANCE AT OCTOBER 31, 2003                                  $     -       $ 100        $ 2,612
                                                             =======       =====        =======
</TABLE>



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


                                      F-4
<PAGE>

[STUBBED]

               TRIMEDIA ENTERTAINMENT GROUP, INC.AND SUBSIDIARIES
            CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
               FOR THE PERIOD JANUARY 1, 2002 TO OCTOBER 31, 2003



<TABLE>
<CAPTION>
                                                                  Additional
                                                                   Paid-in          Accumulated
                                                                   Capital            Deficit            Total
                                                                  -----------       -----------       -----------
<S>                                                               <C>              <C>                <C>
BALANCE AT JANUARY 1, 2002                                         $  584,301       $  (564,537)      $    22,463

Reverse acquisition:
  Conversion of loan payable - stockholder/member                   2,364,168                 -         2,364,168
  Conversion of due to affiliates                                     967,432                 -           967,432

Accrued interest contributed as capital                               202,000                 -           202,000

Common stock subscribed                                                     -                 -            25,000

Net loss for the ten months ended
  October 31, 2002                                                          -          (890,776)         (890,776)
                                                                   ----------       -----------       -----------

BALANCE AT OCTOBER 31, 2002                                        $4,117,901       $(1,455,313)      $ 2,690,287

Issuance of common stock subscribed                                    24,997                 -                 -

Issuance of common stock for services                                 109,990                 -           110,000

Issuance of warrants for services                                     408,600                 -           408,600

Issuance of warrants for financing fees                                84,800                 -            84,800

Issuance of warrants for deferred loan costs                           63,200                 -            63,200

Net loss for the year ended October 31, 2003                                -        (6,586,034)       (6,586,034)
                                                                   ----------       -----------       -----------

BALANCE AT OCTOBER 31, 2003                                        $4,809,488       $(8,041,347)      $(3,229,147)
                                                                   ==========       ===========       ===========
</TABLE>


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


<PAGE>

               TRIMEDIA ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                           YEAR ENDED OCTOBER 31, 2003
                      AND TEN MONTHS ENDED OCTOBER 31, 2002



<TABLE>
<CAPTION>
                                                                                     2003                  2002
                                                                                  -----------            ---------
<S>                                                                             <C>                   <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net loss                                                                        $(6,586,034)           $(890,776)
    Adjustment to reconcile net loss to net cash
    provided by (used in) operating activities
    Warrants issued for services                                                      408,600                    -
    Warrants issued for financing fees                                                 84,800                    -
    Stock issued for expenses                                                         110,000                    -
    Amortization of deferred loan costs                                                63,200                    -
    Amortization of film costs                                                      3,694,162                    -
    Depreciation and amortization                                                     188,898              157,414
    Interest expense                                                                        -               62,000
    (Increase) decrease in assets
      Accounts receivable                                                              13,500               21,274
      Prepaid expenses                                                                (22,287)                   -
      Film costs                                                                      (37,125)            (652,135)
    Increase in liabilities
      Accounts payable and accrued expenses                                         1,678,570              581,338
      Taxes payable                                                                    16,000                    -
      Advances from Sony                                                              135,305                    -
      Due to affiliates                                                                     -              159,190
                                                                                  -----------            ---------

    Net cash provided by (used in) operating activities                              (252,411)            (561,695)
                                                                                  -----------            ---------

CASH FLOWS FROM INVESTING ACTIVITIES
  Due to stockholder                                                                   19,234                    -
                                                                                  -----------            ---------

CASH FLOWS FROM FINANCING ACTIVITIES
  Proceeds from subscription receivable                                                     -               25,000
  Net borrowings on loan payable, stockholder                                               -              132,981
  Net borrowings (payments) on term loans                                             157,891              (10,222)
  Net borrowings on loan payable                                                            -                    -
  Net proceeds (repayments) from demand note payable                                   61,602              435,000
                                                                                  -----------            ---------

  Net cash provided by financing activities                                           219,493              582,759
                                                                                  -----------            ---------

NET INCREASE (DECREASE) IN CASH                                                       (13,684)              21,064

CASH - BEGINNING OF YEAR                                                               27,769                6,705
                                                                                  -----------            ---------

CASH - END OF YEAR                                                                $    14,085            $  27,769
                                                                                  ===========            =========
</TABLE>



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


                                      F-5

<PAGE>


               TRIMEDIA ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
                           YEAR ENDED OCTOBER 31, 2003
                      AND TEN MONTHS ENDED OCTOBER 31, 2002



<TABLE>
<CAPTION>
                                                              2003                   2002
                                                             --------              ---------
<S>                                                          <C>                   <C>
SUPPLEMENTAL DISCLOSURES OF CASH
  FLOW INFORMATION

CASH PAID DURING THE YEAR FOR:
    Interest                                                 $ 81,130              $   57,663
                                                             ========              ==========

SUPPLEMENTAL DISCLOSURES OF NON-CASH
  INVESTING AND FINANCING ACTIVITIES


Capitalized Interest Cost
    Film costs                                               $      -              $  140,000
                                                             ========              ==========
    Additional paid-in capital                               $      -              $  140,000
                                                             ========              ==========


Conversion of loan payable stockholder/member
  to additional paid-in capital                              $      -              $2,364,168
                                                             ========              ==========

Conversion of due to affiliates to
  additional paid-in capital                                 $      -              $  967,432
                                                             ========              ==========

Warrants issued for deferred loan costs                      $ 63,200              $        -
                                                             ========              ==========
Demand notes converted to term notes                         $435,000              $        -
                                                             ========              ==========
Issuance of common stock subscribed                          $ 25,000              $        -
                                                             ========              ==========
</TABLE>



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


                                      F-6
<PAGE>


               TRIMEDIA ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            OCTOBER 31, 2003 AND 2002



NOTE 1 - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of the Business
Trimedia Entertainment Group, Inc. ("Trimedia") and its wholly-owned
subsidiaries, Metropolitan Recording Inc. ("Metropolitan") and TME Entertainment
Film- und Musik- Producktions and -Verwertungs- Gesellschaft m.b.H. ("TME")
(together "the Company") operate a state of the art recording studio for film,
video, audio and television productions and operate independent film production
companies.

Basis of Presentation
The consolidated financial statements include the accounts of Metropolitan
Recording Inc., Snipes Production, LLC and Ruffnation Films LLC. These companies
were associated through common ownership during the year ended October 31, 2001
and the period ended April 21, 2002. On April 22, 2002 Metropolitan Recording
Inc. acquired all of the interest of Snipes Productions, LLC and Ruffnation
Films LLC in a reorganization intended to qualify as tax-free exchange under
Section 351 of the Internal Revenue code of 1986, as amended. On October 2,
2002, Trimedia, a public company, acquired 100% of the outstanding common stock
of Metropolitan Recording Inc. which was accounted for as a reverse acquisition.
In July 2003, the Company formed TME, a wholly owned foreign production company.

Comprehensive Income
The Company follows the Statement of Financial Accounting Standard ("SFAS") No.
130, "Reporting Comprehensive Income." Comprehensive income is a more inclusive
financial reporting methodology that includes disclosure of certain financial
information that historically has not been recognized in the calculation of net
income. Since the Company has no items of other comprehensive income,
comprehensive income (loss) is equal to net income (loss).

Fair Value of Financial Instruments
The Company's financial instruments consist of cash and accounts payable. The
carrying values of cash and accounts payable approximate fair value because of
their short maturities.

The carrying value of the term loans, demand note payable and loan
payable-stockholder approximates fair value since the interest rate associated
with the debt approximates the current market interest rate.

Concentration of Credit Risk Involving Cash
The Company maintains cash balances at several financial institutions. Accounts
at each institution are insured by the Federal Deposit Insurance Corporation up
to $100,000. During the year, the Company may have cash balances in these
financial institutions in excess of these limits. At October 31, 2003 there were
no balances in excess of insurable amounts.

Accounts Receivable
The Company, in the normal course of business, extends credit to their
customers. The Company uses the allowance method for uncollectible accounts.
Management believes that accounts receivable for all periods presented are fully
collectible, therefore, no allowance for doubtful accounts was recorded.

Film Costs
Costs of making motion picture films that are produced for sale to third parties
are stated at the lower of cost, less accumulated amortization, or fair value.
Film costs are expensed based on the ratio of the current period gross revenues
to estimated total gross revenues from all sources on an individual production
basis. This ratio requires the use of estimates based on management's knowledge
and experience; therefore, actual results could differ from this estimate.
Amortization of the film costs associated with the film "Snipes" commenced upon
distribution of the DVD in February 2003. The film costs were fully amortized
during 2003, resulting in $3,694,162 of amortization expense. Since the
distribution of the movie did not occur until 2003, there was no amortization of
film costs in 2002.


                                      F-7
<PAGE>


               TRIMEDIA ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            OCTOBER 31, 2003 AND 2002



NOTE 1 - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
         (Continued)


Depreciation
The cost of property and equipment is depreciated over the estimated useful
lives of the related assets. Depreciation is computed using the straight-line
method.

Income Taxes
The Company follows SFAS 109, "Accounting for Income Taxes", which requires an
asset and liability approach to financial accounting and reporting for income
taxes. Deferred income tax assets and liabilities are computed annually for
temporary differences between the financial statement and tax bases of assets
and liabilities that will result in taxable or deductible amounts in the future
based on enacted tax laws and rates applicable to the periods in which the
differences are expected to affect taxable income. Valuation allowances are
established when necessary to reduce deferred tax assets to the amount expected
to be realized. Income tax expense is the tax payable or refundable for the
period plus or minus the change during the period in deferred tax assets and
liabilities.

Prior to October 2, 2002 Metropolitan Recording Inc. was a corporation taxed
under the provisions of Subchapter "S" of the Internal Revenue Code. Ruffnation
Films LLC and Snipes Productions, LLC are limited liability companies and were
taxed as partnerships under provisions of the Internal Revenue Code. Under these
provisions, the companies do not pay federal and state income taxes on its
taxable income. Instead, the stockholders/members are liable for individual
federal and state income taxes on their respective shares/interest of the
companies' taxable income or have included their respective shares/interest of
the companies' net operating loss in their individual income tax returns.
Commencing on October 2, 2002 the companies are taxed as corporations.

Loss Per Share
The Company follows SFAS 128, "Earnings Per Share" resulting in the presentation
of basic and diluted earnings (loss) per share. The loss per share calculations
include the change in capital structure for all periods presented. 1,000,000
shares of Series A Convertible Preferred Stock, convertible into 10,000,000
shares of common stock, were outstanding at October 31, 2003 but were not
included in the computation of diluted loss per share because to do so would be
antidilutive.

Cost of Start-Up Activities
In accordance with the American Institute of Certified Public Accountants
("AICPA") Statement of Position No. 98-5, "Reporting on the Costs of Start-Up
Activities" ("SOP 98-5"), the costs of start-up activities and organization
costs are expensed as incurred.

Revenue Recognition and Accounting for Exploitation Costs
The Company's policy for revenue recognition and accounting for exploitation
costs, including advertising and marketing expenses and development and overhead
costs is in accordance with the AICPA Statement of Position No. 00-2,
"Accounting by Producers or Distributors of Films" ("SOP 00-2").

Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires the use of estimates based on
management's knowledge and experience. Accordingly, actual results could differ
from those estimates.


                                      F-8

<PAGE>


               TRIMEDIA ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            OCTOBER 31, 2003 AND 2002



NOTE 1 - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
         (Continued)


Recoverability of Long Lived Assets
Effective January 1, 2002, the Company adopted SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets" ("Statement 144"), effective in
fiscal years beginning after December 15, 2001, with early adoption permitted,
and in general are to be applied prospectively. Statement 144 establishes a
single accounting model for the impairment or disposal of long-lived assets,
including discontinued operations. Statement 144 superseded Statement No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of," and APB Opinion No. 30, "Reporting the Results of Operations -
Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary,
Unusual and Infrequently Occurring Events and Transactions." The adoption of
Statement 144 did not have a material effect on the Company's financial position
or results of operations.

Recently Issued Accounting Pronouncements
In December 2002, the FASB issued Statement of Financial Accounting Standard No.
148 ("SFAS 148"), Accounting for Stock-Based Compensation - Transition and
Disclosure. SFAS 148 provides alternative methods of transition for voluntary
change to the fair value based method of accounting for stock-based employee
compensation. SFAS 148 also requires prominent disclosure in the "Summary of
Significant Accounting Policies" of both annual and interim financial statements
about the method of accounting for stock-based employee compensation and the
effect of the method used on reported results. The Company hasl adopted the
disclosure requirements of SFAS 148 for the 2003 fiscal year. Adoption of this
statement has affected the location of the Company's disclosure in the
consolidated financial statements, but will not impact the Company's results of
operation or financial position unless the Company changes to the fair value
method of accounting for stock-based employee compensation.

On April 22, 2003, the FASB announced its decision to require all companies to
expense the fair value of employee stock options. Companies will be required to
measure the cost according to the fair value of the options. Although the new
guidelines have not yet been released, it is expected that they will be
finalized soon and be effective in 2004. When final rules are announced, the
company will assess the impact to its financial statements.

The following recently issued accounting pronouncements are currently not
applicable to the Company.

In November 2002, the FASB issued Interpretation 45, "Guarantor's Accounting and
Disclosure Requirements for guarantees, Including Indirect Guarantees of
Indebtedness of Others." This Interpretation expands the disclosures to be made
by a guarantor about its obligations under certain guarantees and requires that,
at the inception of a guarantee, a guarantor recognize a liability for the fair
value of the obligation undertaken in issuing the guarantee. The disclosure
requirements are effective immediately. The initial recognition and measurement
provisions of this Interpretation are effective for guarantees issued or
modified after December 31, 2002.

In January 2003, the FASB issued FASB Interpretation No. 46 ("FIN 46"),
Consolidation of Variable Interest Entities - An Interpretation of AARB N. 51.
FIN 46 requires that if any entity has a controlling financial interest in a
variable interest entity, the assets, liabilities and results of activities of
the variable interest entity should be included in the consolidated financial
statements of the entity. FIN 46 provisions are effective for all arrangements
entered into after January 31, 2003. For those arrangements entered into prior
to January 31, 2003, FIN 46 provisions are required to be adopted at the
beginning of the first interim or annual period beginning after June 15, 2003.

                                      F-9

<PAGE>


               TRIMEDIA ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            OCTOBER 31, 2003 AND 2002



NOTE 1 - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
         (Continued)

Recently Issued Accounting Pronouncements (Continued)

In April 2003, the FASB issued Statement of Financial Accounting Standard No.
149 ("SFAS 149"), Amendment of Statement 133 on Derivative Instruments and
Hedging Activities. SFAS 149 amends and clarifies accounting for derivative
instruments, including certain derivative instruments embedded in other
contracts and for hedging activities under SFAS 133. SFAS 149 is generally
effective for derivative instruments, including certain derivative instruments
embedded in other contracts and for hedging activities under SFAS 133. SFAS 149
is generally effective for derivative instruments, including derivative
instruments embedded in certain contracts, entered into or modified after June
30, 2003 and for hedging relationships designated after June 30, 2003.

In May 2003, the FASB issued Statement of Financial Accounting Standard No. 150
("SFAS 150"), Accounting for Certain Financial Instruments With Characteristics
of Both Liabilities and Equity. SFAS 150 clarifies the accounting for certain
financial instruments be classified as liabilities on the balance sheet.
Previously, many of those financial statements were classified as equity. SFAS
150 is effective for financial instruments entered into or modified after May
31, 2003 and otherwise is effective at the beginning of the first interim period
beginning after June 15, 2003.


NOTE 2 - SHARE EXCHANGE

On October 2, 2002, Trimedia, a public company with 17,999,000 common shares
outstanding and immaterial net assets, acquired 100% of the outstanding common
stock of Metropolitan from Christopher Schwartz. Christopher Schwartz received
stock of Trimedia in exchange for the common stock of Metropolitan. The
acquisition resulted in Christopher Schwartz having voting control of Trimedia
and becoming chief executive officer and president of Trimedia pursuant to an
employment agreement. Therefore, Christopher Schwartz has effective control of
the combined entity.

Under accounting principles generally accepted in the United States, the share
exchange is considered to be a capital transaction in substance, rather than a
business combination. That is, the share exchange is equivalent to the issuance
of stock by Metropolitan for the net monetary assets of Trimedia, accompanied by
a recapitalization, and is accounted for as a change in capital structure.
Accordingly, the accounting for the share exchange will be identical to that
resulting from a reverse acquisition, except no goodwill will be recorded. Under
reverse takeover accounting, the post reverse acquisition comparative historical
financial statements of the legal acquirer, Trimedia, are those of the legal
acquiree, Metropolitan, which are considered to be the accounting acquirer.

The Company has adopted the fiscal year end of the legal acquirer, which is
October 31st.

It is the intention of the parties that the share exchange described above will
be a tax-free reorganization under Section 368 of the Internal Revenue Code of
1986, as amended.

Accordingly, the consolidated financial statements of Trimedia as of October 31,
2002 and for the ten months then ended, are the historical financial statements
of Metropolitan for the same period adjusted for the following transactions
contained in the share exchange agreement executed at consummation of the
acquisition. The basic structure and terms of the acquisition, together with the
applicable accounting effects, were as follows:


                                      F-10

<PAGE>


               TRIMEDIA ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            OCTOBER 31, 2003 AND 2002



NOTE 2 - SHARE EXCHANGE (Continued)

      o   Trimedia acquired all of the outstanding shares of common stock of
          Metropolitan from Christopher Schwartz in exchange for (a) 8,000,000
          shares of common stock, $.0001 per value per share, of Trimedia and
          (b) 1,000,000 shares of Series A Convertible Preferred Stock, $.0001
          par value per share, of Trimedia; each share of Series A Convertible
          Preferred Stock is convertible into 10 shares of common stock at the
          option of the holder and is entitled to 10 votes in all matters
          submitted to a vote by shareholders. The common stock and Series A
          Convertible Preferred Stock exchanged, in addition to the existing
          Trimedia shares outstanding, collectively resulted in the
          recapitalization of Trimedia. Earnings per share calculations include
          Trimedia's change in capital structure for all periods presented.

      o   Loans payable, including accrued interest, to Christopher Schwartz and
          controlled companies in the amount of $3,331,600 were discharged and
          reflected as contributed capital.

Prior to the closing of the share exchange agreement, all of the assets totaling
approximately $181,000 less all of the liabilities totaling approximately
$161,000 relating to the former business of Trimedia was conveyed to an entity
owned by the former officers and director of Trimedia.


NOTE 3 - MANAGEMENT PLANS

Since its inception, the Company has incurred significant losses and, as of
October 31, 2003 had accumulated losses of $8,041,347. For the year ended
October 31, 2003 and ten months ended October 31, 2002, the Company's net losses
were $6,586,034 and $890,776. In addition, the Company had negative working
capital of $3,447,584 at October 31, 2003 and experienced negative cash flow
from operations of $252,411 and $561,695 for the year ended October 31, 2003 and
ten months ended October 31, 2002. The Company may incur further operating
losses and experience negative cash flow in the future. Achieving profitability
and positive cash flow depends on the Company's ability to generate sufficient
revenues from its films and recording studio and raise additional capital in
equity markets. There can be no assurances that the Company will be able to
generate sufficient revenues or raise additional capital to achieve and sustain
profitability and positive cash flow in the future.

The Company has no firm commitments for funding its operations. The Company has
historically relied principally on equity financing and loans from its principal
stockholder and third parties to meet its cash requirements. The Company intends
to raise additional capital from the sale of its securities. However, there can
be no assurances that the company will be successful in raising sufficient
capital to have a material positive effect of the company's operations and cash
flow.

The Company has outstanding debt in the aggregate principal amount of
approximately $1,903,000 as of October 31, 2003. The Company has granted
security interests in substantially all of its assets to secure its obligations
to repay approximately $803,000 of this indebtedness. The Company is required to
pay down the debt with the proceeds received from any sale of its securities or
from revenues generated from the commercial release and sale of the film
"Snipes". During Fiscal 2004, the Company anticipates continuing to pursue all
possible funding scenarios that will finance the Company's business operations,
including but not limited to: the private placement of the Company's securities,
international and domestic joint ventures for the development and production of
entertainment content, licensing of products for distribution and exploitation
in global markets; subsidies for financing of film productions in various
markets, debt financing, merger with a foreign listed company, structured
partnerships on a project basis and tax based financing in jurisdictions that
provide incentives for business development. In January 2004, the Company
received approximately $400,000 from private placement of the Company's
securities. Each of these possible funding scenarios outlined in this paragraph
are subject to change and cannot be predicted with certainty. There can be no
assurance that our planned business operations will obtain the financing
required or achieve favorable results.


                                      F-11

<PAGE>


               TRIMEDIA ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            OCTOBER 31, 2003 AND 2002



NOTE 3 - MANAGEMENT PLANS (Continued)

There can be no assurance that such funding will be generated or available on
terms acceptable to the Company, or at all, or that the commercial exploitation
of the Company's products will be economically profitable for the Company. These
uncertainties raise substantial doubt about the ability of the Company to
continue as a going concern. Significant additional funding will be required
during fiscal 2004 to meet expected negative operating cash flows.


NOTE 4 - PROPERTY AND EQUIPMENT

Property, equipment and estimated useful lives consist of the following:


<TABLE>
<CAPTION>
                                                             YEARS              2003            2002
                                                            ------           ----------      ----------
<S>                                                          <C>            <C>              <C>
Studio equipment                                             5 - 7           $1,162,053      $1,162,053
Office furniture                                                 7               12,270          12,270
Studio improvements                                             39              756,700         756,700
                                                                             ----------      ----------
                                                                              1,931,023       1,931,023
Less:  Accumulated depreciation                                                 612,786         423,888
                                                                             ----------      ----------

                                                                             $1,318,237      $1,507,135
                                                                             ==========      ==========
</TABLE>


Related depreciation and amortization expenses were $188,898 and $157,414 for
the year ended October 31, 2003 and the ten months ended October 31, 2002.


NOTE 5 - TERM LOANS

In August 2001, Metropolitan entered into a term loan with a bank in the amount
of $162,000. The term loan matures in august 2006. The loan is payable in
monthly installments of $1,965, including interest at 8%, with a lump sum
payment due at maturity of $99,858. The loan is collateralized by all assets of
Metropolitan and a personal guarantee by Christopher Schwartz, the Company's
chief Executive Officer. The loan agreement allows for prepayment of the loan in
full without penalty. The loan agreement has a provision that states any change
of ownership of 25% or more of the common stock of Metropolitan without the
waiver and consent of the bank is an event of default. The share exchange
agreement entered into on October 2, 2002 resulted in a change of ownership of
greater than 25% of the common stock of Metropolitan, without the prior written
consent of the lender, and therefore Metropolitan is in technical default of
this loan agreement.

Upon default, the bank, at its option, may increase the interest rate four basis
points, demand payment in full of the outstanding principal balance plus accrued
interest and hold Metropolitan liable for all collection costs incurred by the
bank. Since Metropolitan did not obtain a waiver from the bank regarding the
change of ownership that resulted from the share exchange the total outstanding
amount of this note is reflected as a current liability. At October 31, 2003 and
2002, the total outstanding balance of the term loan was $137,376 and $148,237.



                                      F-12

<PAGE>


               TRIMEDIA ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            OCTOBER 31, 2003 AND 2002



NOTE 5 - TERM LOANS (Continued)

On November 1, 2002, the Company borrowed $250,000 from Trident Growth Fund, LP
(f/k/a Gemini Growth Fund, L.P.) ("Trident") pursuant to a loan agreement. The
loan bears interest at 14% per annum, payable in monthly installments commencing
November 30, 2002. The note matured on November 30, 2003 and is secured by a
lien on the film "Snipes." The note is convertible, at the holder's option, into
common stock at a conversion price of $1 per share. As of July 31, 2003, the
company did not meet certain financial loan covenants and was therefore in
technical default of the loan agreement. On September 11, 2003 Trident waived
the Company's compliance with the financial loan covenants through October 31,
2003. At October 31, 2003, the total outstanding balance of the term loan was
$168,788. In January 2004, Trident converted the note into 168,788 shares of the
Company's common stock at a conversion price of $1 per share and paid all
accrued interest on the principal balance of this loan.

In June 2002, the Company entered into a loan agreement with a corporation
pursuant to which the Company borrowed $400,000. Principal and accrued interest,
at a rate of 24% per annum, was payable on demand or the date ten calendar days
after the date on which the Company conducts a closing of at least $5,000,000 in
a private placement offering. The note was secured by a lien interest in the
film "Snipes." During September 2002, the Company entered into another loan
agreement with the same corporation in which the Company borrowed $35,000.
Principal and accrued interest, at a rate of 10% per annum, was payable upon
demand. The note was unsecured.

In April 2003, the Company consolidated these two loans into one promissory note
for $435,000, with principal and accrued interest, at a rate of 35% per annum,
due in full on October 31, 2003. This note is secured by a second lien security
interest in the film "Snipes." On October 30, 2003, pursuant to a letter
agreement, the parties amended the promissory note to extend the maturity date
to April 30, 2004.


NOTE 6 - DEMAND NOTES PAYABLE

In February 2003, Trimedia borrowed $12,500 from a third party lender, with
principal and interest, at 10% per annum, due on demand.

In June 2003, Trimedia borrowed $67,102 from a third party lender, with
principal and interest, at 12% per annum, due on demand.

In July 2003, Trimedia borrowed $17,000 from a third party lender, with
principal and interest, at 12% per annum, due on demand.

In August 2003, the Company repaid $35,000 of the demand note payable.


NOTE 7 - DUE TO STOCKHOLDER

Due to stockholders represents loans to the Company from its stockholder that
are due and payable on demand.



                                      F-13



<PAGE>


               TRIMEDIA ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            OCTOBER 31, 2003 AND 2002



NOTE 8 - LOAN PAYABLE - STOCKHOLDER

Loan payable - stockholder is an unsecured demand note payable to Christopher
Schwartz accruing interest at 7% per annum. Interest expense, associated with
this note for the year ended October 31, 2003 and for the ten months ended
October 31, 2002 was $57,750 and $-0-. In addition, $19,250 and $38,500 of
interest was capitalized as part of films costs for the year ended October 31,
2003 and the ten months ended October 31, 2002. Christopher Schwartz does not
intend to call this note during the next fiscal year and therefore the note is
reflected on the balance sheet as a non-current liability.


NOTE 9 - STOCKHOLDERS' EQUITY

Common Stock
On October 17, 2002, the Company received $25,000 proceeds from a stock
subscription for 25,000 shares of common stock. The shares were issued in July
2003.

In June 2003, the Company issued to Trident 100,000 shares of its common stock
in exchange for a waiver of the requirement under the loan agreement to register
the resale of the shares of common stock issuable upon conversion of the note or
exercise of warrants within 180 days of the loan agreement through October 31,
2002. Upon issuance of the 100,000 shares of common stock, the Company
recognized expense of $110,000.

Options
Pursuant to the terms of his Employment Agreement (Note 12), Christopher
Schwartz received options to purchase 5,786,707 shares of the Companies' common
stock. The exercise price per share of these options is calculated based on the
closing price of our common stock on the respective dates that the options vest
pursuant to the Employment Agreement as follows:

  o  750,000 shares vested upon the commencement of Christopher Schwartz'
     employment on October 9, 2002 at an exercise price of $1.50 per share;
  o  825,000 shares vested on October 9, 2003 at an exercise price of $1.09
     per share;
  o  907,500 shares on October 9, 2004;
  o  998,250 shares on October 9, 2005;
  o  1,098,075 shares on October 9, 2006; and
  o  1,207,882 shares on October 9, 2007

In order to exercise the options, Christopher Schwartz must be employed by the
Company on the option vesting dates. The options may be exercised for ten years
from the date the options vest. None of the options have been exercised by
Christopher Schwartz.

The Companies applies ABP Opinion 25, "Accounting for Stock Issued to
Employees," and related interpretations in accounting for the issuance of its
stock options. Accordingly, no compensation cost has been recognized for its
stock options issued during the year ended October 31, 2003 and ten months ended
October 31, 2002. Had compensation cost for the Company's issuance of vested
stock options been determined based on the fair value at grant dates for options
consistent with the method of FASB Statement 123, the Company's net loss and net
loss per share would have been increased to the pro forma amounts indicated
below. Fair value amounts were estimated using the Black-Scholes model with the
following assumptions: no dividend yield, expected volatility of 80%, and a
risk-free interest rate of 5.27% for 2003 and 4.7% for 2002.


                                      F-14
<PAGE>

               TRIMEDIA ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            OCTOBER 31, 2003 AND 2002



NOTE 9 - STOCKHOLDERS' EQUITY (Continued)

Options (Continued)

<TABLE>
<CAPTION>
                                                         2003             2002
                                                      ----------       ----------
<S>                                <C>                <C>              <C>
         Net loss                  As reported        $6,586,034       $  890,776
                                   Pro forma          $7,345,034       $1,834,776

         Net loss per share        As reported        $     0.25       $     0.03
                                   Pro forma          $     0.28       $     0.07
</TABLE>


Warrants
As described in Note 4 above, on November 1, 2002, the Company entered into a
loan agreement pursuant to which it borrowed $250,000 from Trident. In
connection with this loan, the Company issued to Trident a secured convertible
promissory note in the principal amount of $250,000, bearing interest at 14% per
annum, and a warrant to purchase 62,500 shares of their common stock pursuant to
Section 4(2) of the Securities Act.

The Company's obligation to repay the note is secured by a security interest
granted to the lender covering substantially all of the Company's assets. The
note matures on November 30, 2003; however, the Company has the option to redeem
the principal amount of the note at no premium at any time prior to the maturity
date. Trident has the option to convert the principal amount of the note plus
all accrued interest thereon into shares of the Company's common stock at a
conversion price of $1.00 per share. The warrants expire on October 30, 2007,
and have an exercise price of $1.50 per share, subject to antidilution and price
adjustments pursuant to the agreements. The Company paid loan commitment and
origination fees of 1% ($2,500) and 4% ($10,000), respectively. Interest is
payable in cash unless Trident elects to have the interest paid in shares of the
Company's common stock. As described in the loan covenants, the Company is
required to comply with various financial and other covenants. Trident may deem
any failure to comply with such covenants to be a default on the loan. Under the
terms of the loan agreement, the Company is required to register the resale of
the shares of common stock issuable upon conversion of the note or exercise of
the warrants, within 180 days of the date of the loan agreement. If the common
stock is not fully registered within 180 days, at the option of Trident, the
Company is subject to a penalty of .1% shares of the Company's common stock then
outstanding computed on a fully diluted basis per day until the shares are
registered. In accordance with the fair value method as described in the
accounting requirements of the Statement of Financial Accounting Standards
("SFAS") No. 123, the Company recognized deferred loan costs of $63,200 as the
value of the warrant.

Additionally, during Fiscal 2003, the Company issued various Stock Purchase
Warrants to purchase a total of 695,000 shares of its common stock at exercise
prices of $1.13 to $1.50 per share pursuant to Section 4(2) of the Securities
Act in exchange for consulting services and financing expenses. The Stock
Purchase Warrants are exercisable through 2008 and the holders are entitled to
piggyback registration rights. In accordance with the fair value method as
described in accounting requirements of SFAS No. 123, the Company recognized
expenses of $493,400 in connection with the issuance of these Stock Purchase
Warrants.


                                      F-15



<PAGE>


               TRIMEDIA ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            OCTOBER 31, 2003 AND 2002



NOTE 9 - STOCKHOLDERS' EQUITY (Continued)

Warrants (Continued)

A summary of the warrants issued by the Company are as follows:

<TABLE>
<CAPTION>
                                             Number of        Option Price Per       Weighted Average
                                              Shares            Share Range           Exercise Price
                                             ---------        ----------------       ----------------
<S>                                         <C>              <C>                    <C>
   WARRANTS OUTSTANDING AT
    OCTOBER 31, 2002                                 -                     -                  -

   WARRANTS GRANTED                            757,500        $1.13 TO $1.50              $1.33
                                               -------        --------------              -----
   WARRANTS OUTSTANDING AT
    OCTOBER 31, 2003                           757,500        $1.13 TO $1.50              $1.33
                                               =======        ==============              =====


</TABLE>


The warrants that are exercisable at October 31, 2003 are summarized as follows:
<TABLE>
<CAPTION>
             <S>                    <C>                    <C>                      <C>
                                        Weighted
                                         Average           Number of Warrants
                                        Remaining              Currently             Weighted Average
             Warrant Price           Contractual Life         Exercisable            Exercise Price
             --------------          ----------------      -------------------      ----------------
             $1.13 to $1.50             3.76 YEARS             757,500                  $1.33
</TABLE>


There were no warrants issued during the ten months ended October 31, 2002.


NOTE 10 - INCOME TAXES

As discussed in Note 1, the Company utilizes the asset and liability method of
accounting for income taxes in accordance with SFAS 109. The effective tax rates
differ from the statutory rate primarily due to the Company's historical
corporate structure. Previous to October 2, 2002, the Company was not subject to
corporation taxes, rather the tax consequences were the responsibility of the
individual stockholder, resulting in a permanent difference. The reconciliation
of the statutory federal rate to the Company's historical income tax expense
(benefit) is as follows:

                                      F-16

<PAGE>


               TRIMEDIA ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            OCTOBER 31, 2003 AND 2002


NOTE 10 - INCOME TAXES (Continued)
<TABLE>
<CAPTION>

                                                         Year Ended              Ten Months Ended
                                                      October 31, 2003           October 31, 2002
                                                      ----------------           ----------------
          <S>                                         <C>                        <C>
          Income tax benefit at
            U.S. federal income tax rate                $(2,239,000)                $(306,700)
          Losses attributable directly
            to stockholders                                       -                   279,200
          Valuation allowance                             2,239,000                    27,500
                                                        -----------                 ---------
          Income tax benefit                            $         -                 $       -
                                                        ===========                 =========
          Income tax benefit consists
            of the following:
          Current tax benefit
          Federal                                       $         -                 $       -
          State                                                   -                         -
                                                        -----------                 ---------
                                                        $         -                 $       -
                                                        -----------                 ---------
          Deferred tax benefit
            Federal                                     $ 2,266,000                 $  27,500
            State                                                 -                         -
            Valuation allowance                          (2,266,000)                  (27,500)
                                                        -----------                 ---------
                                                                  -                         -
                                                        -----------                 ---------
                                                        $         -                 $       -
                                                        ===========                 =========
</TABLE>


The components of the deferred assets (liabilities) are as follows:

                                           2003                  2002
                                        -----------            --------

          Net operating loss             $2,266,000            $ 27,500
          Valuation allowance            (2,266,000)            (27,500)
                                         ----------            --------

                                         $        -            $      -
                                         ==========            ========

At October 31, 2003, the Company had a net operating loss of approximately
$6,666,000 which if not used will expire in 2023.


NOTE 11 - LEASE COMMITMENTS

The Company leases its office and studio space from an affiliated company, that
is commonly-controlled, for $15,000 per month, under a lease agreement. The
affiliated company's lease expires on March 31, 2004 and contains two five-year
options, with annual increases of 3% during the first option period and 4%
during the second option period. Rent expense for the year ended October 31,
2003 and the ten months ended October 31, 2003 amounted to approximately
$180,000 and $150,000.

During 2002, the Company subleased a portion of its office space to an unrelated
company generating rental income of approximately $50,000 for the ten months
ended October 31, 2002.


                                      F-17

<PAGE>


               TRIMEDIA ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            OCTOBER 31, 2003 AND 2002



NOTE 12 - EMPLOYMENT AGREEMENTS

The Company entered into an employment agreement with Christopher Schwartz, the
chairman and chief executive officer, which provides for an annual base salary
of $300,000, with annual increases of at least 10%, for a period of five years.
In addition, Mr. Schwartz received option grants described in Note 9. The
Company also may enter into employment agreements with certain other key
employees.


NOTE 13- BUSINESS SEGMENTS

The Company follows SFAS No. 131, "Disclosures About Segments of and Enterprise
and Related Information" which requires the Company to provide certain
information about their operating segments. The Company has two reportable
segments: recording studio and film production.

Summarized financial information concerning the Company's reportable segments,
which are based in the United States, is reflected in the following table:

<TABLE>
<CAPTION>

            For The Year Ended                 Recording             Film
               October 31, 2003                  Studio           Production             Total
        -----------------------------         ------------        -----------          ----------
       <S>                                     <C>                 <C>                    <C>
        Net sales                               $   41,026        $1,061,034           $1,102,060
        Loss from operations                       216,437         6,396,517            6,612,954
        Total assets                             1,312,065            42,744            1,354,809
        Depreciation and amortization              182,409             6,489              188,898
        Capital expenditures                    $        -        $        -           $        -

            For The Ten Months Ended
                October 31, 2002
        -----------------------------

        Net sales                               $   55,353        $   10,000           $   65,353
        Loss from operations                       575,861           326,129              940,776
        Total assets                             1,492,322         3,702,105            5,205,641
        Depreciation and amortization              152,004             5,410              157,414
        Capital expenditures                    $        -        $        -           $        -
</TABLE>


NOTE 14 - JOINT VENTURE

The Company entered into a 50/50 joint venture agreement as of September 20,
2002 with Sony Music, a group of Sony Music Entertainment Inc. ("Sony") to form
Charles Street, a Delaware limited liability company. Charles Street is
comprised of two separate but interrelated business operations: Film venture and
label venture.

Under the terms of the joint venture agreement, the Company will fund the
creation, production and marketing of ten films and Sony, on behalf of the joint
venture, will have the exclusive worldwide right to manufacture, market and
distribute DVD's of the film intended for home use. The motion picture entitled
"Snipes" is considered the first film under the film venture.


                                      F-18

<PAGE>


               TRIMEDIA ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            OCTOBER 31, 2003 AND 2002



NOTE 14 - JOINT VENTURE (Continued)

The label venture requires the Company to refer recording artists to the joint
venture and gives Sony the exclusive worldwide right, on behalf of the label
venture, to manufacture, market and distribute records embodying the musical
performances of artists approved by Sony.

In exchange for providing distribution services for the film and label ventures,
Sony will receive a distribution fee based on a percentage of the net billings
of the ventures, as defined in the agreement.


NOTE 15 - SUBSEQUENT EVENTS

On November 3, 2003 the Board of Directors of the Company authorized the Company
to offer for sale up to 15,000,000 shares of its common stock pursuant to a
private placement offering.

In January 2004, the Company sold 400,000 shares of its common stock as part of
a private placement offering for $1 per share.

On January 20, 2004 the Company formed two Delaware Corporations, Trimedia Film
Group, Inc. and TM Film Distribution, Inc. in anticipation of potential future
Financing transactions.




                                      F-19




<PAGE>



                                   SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this Annual Report on Form 10-KSB to be
signed on its behalf by the undersigned thereunto duly authorized, in the City
of Philadelphia, Commonwealth of Pennsylvania.

Date: February 13, 2004
                                            TriMedia Entertainment Group, Inc.


                                            By: /s/  Christopher Schwartz
                                                --------------------------------
                                                Chief Executive Officer and
                                                Chief Financial Officer
                                                (principal financial officer and
                                                principal accounting officer)