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                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, 2004         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)

                       1080 N. DELAWARE AVENUE, 8TH FLOOR
                        PHILADELPHIA, PENNSYLVANIA 19125
               --------------------------------------------------
               (Address of principal executive offices, Zip Code)

                                 (215) 426-5536
                ------------------------------------------------
                (Issuer's Telephone Number, including Area Code)

        SECTION REGISTERED UNDER SECTION 12(b) OF THE EXCHANGE ACT: None.

     SECURITIES REGISTERED PURSUANT TO              NAME OF EACH EXCHANGE ON
         SECTION 12(g) OF THE ACT:                      WHICH REGISTERED:
  ----------------------------------------          ------------------------
  Common Stock, par value $.0001 per share                    None

        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 $239,070.

        The aggregate market value of the voting common stock held by
non-affiliates of the issuer, as of January 24, 2005, was approximately
$8,118,818 (based on the average closing bid and asked prices of the
registrant's common stock in the over-the-counter market).

        As of January 27, 2005, 29,729,650 shares of the registrant's common
stock, par value $.0001 per share, were issued and outstanding.

        Documents Incorporated by Reference: None.

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                                                TABLE OF CONTENTS
<TABLE>
<S>                                                                                                         <C>
PART I
  ITEM 1    -   DESCRIPTION OF BUSINESS ..................................................................    1
  ITEM 2    -   DESCRIPTION OF PROPERTY ..................................................................   19
  ITEM 3    -   LEGAL PROCEEDINGS ........................................................................   19
  ITEM 4    -   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS ......................................   19

PART II
  ITEM 5    -   MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS .................................   19
  ITEM 6    -   MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION ................................   23
  ITEM 7    -   FINANCIAL STATEMENTS .....................................................................   29
  ITEM 8    -   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE .....   29
  ITEM 8A       CONTROLS AND PROCEDURES ..................................................................   29

PART III
  ITEM 9    -   DIRECTORS AND EXECUTIVE OFFICERS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT ......   29
  ITEM 10   -   EXECUTIVE COMPENSATION ...................................................................   32
  ITEM 11   -   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
                 MATTERS .................................................................................   35
  ITEM 12   -   CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS .....................................   36
  ITEM 13   -   EXHIBITS, LIST AND REPORTS ON FORM 8-K ...................................................   37
  ITEM 14   -   PRINCIPAL ACCOUNTANT FEES AND SERVICES ...................................................   40

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

                                       (i)
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                           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");
            o   Snipes Production LLC ("Snipes");
            o   TM Film Distribution, Inc. ("TMF"); and
            o   TriMedia Film Group, Inc ("TFG").

        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 Chairman, Chief Executive Officer 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 to deliver product and programming
to improve their profitability and create market share.

        Our principal executive offices are located at 1080 N. Delaware Avenue,
8th Floor, Philadelphia, Pennsylvania 19125 where we have our corporate,
recording and film offices and our recording production studio.

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FILMS

        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 Pop,
Hip-Hop and Urban Music are active consumers throughout the world, purchasing
CDs, DVDs, records, clothes and concert tickets. In addition, members of the Pop
and 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 Pop and Hip-Hop audience.

        Ruffnation Films will produce low budget films with plots and marquee
name music artists that are relevant to the mainstream youth culture,
particularly the Pop, 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 BMG Music Entertainment, Inc. ("Sony BMG") will be produced and distributed
through Charles Street, our co-venture with Sony BMG. For each of these
projects, Sony BMG will provide the soundtrack component, giving Ruffnation
Films access to Sony BMG marquee artists and Sony BMG 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 BMG Co-Venture

        Charles Street, our co-venture with Sony BMG, 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 ten films for Charles
Street. Sony BMG 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 or the date we deliver ten films to Sony BMG (the "Film
Term"). If Sony BMG 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 BMG. Sony BMG 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 BMG 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
BMG. Sony BMG is responsible for activities relating to marketing, publicity and
promotion of home videos on behalf of Charles Street. Sony BMG pays marketing
costs in connection with the films. Sony BMG 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 BMG out of gross revenues generated by sales of the film. All of
Sony BMG'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 BMG proportionately based on the amount of
marketing costs incurred by Sony BMG 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 BMG 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 BMG 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

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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.

        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 BMG Co-Venture relating to our music
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 or Fiscal 2004. 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. In Fiscal 2005, we
re-released Snipes as a combination DVD/CD package through Charles Street for
distribution in the U.S. consumer market in connection with Nelly's concert
tour. Additionally, in Fiscal 2005, we intend to release a film entitled Train
Ride through Charles Street and to commence production of our new movie, Four
Point Play. TrainRide is an urban drama that follows the harrowing events on a
college campus and stars Wood Harris (HBO's The Wire), Russell Hemsby (ESPN's
Playmakers) and hip-hop star MC Lyte.

        Sony BMG 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 June 30, 2004, the last quarter for which a report has been received,
Sony BMG reported gross billings for Charles Street related to the release of
the Snipes DVD/Home Video of $2,346,912 and net profits of $1,143,228, of which
our portion is $946,972. There were no additional payments received from Sony
BMG in Fiscal 2004. In November 2004, Snipes was re-released as a combination
DVD/CD package in the U.S., United Kingdom and various European territories.
Although we may receive additional payments from Charles Street in Fiscal 2005
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

        Ruffnation Films' projects that are not distributed through Charles
Street may be distributed in the United States through RED Distribution, Inc.
("RED"), Sony BMG'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 estimate 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

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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 multiple potential revenue streams for each of our business
operations.

        Keydata Media & Marketing 1 LLP Distribution

        In Fiscal 2004, we formed two wholly owned subsidiaries, TM Film
Distribution Inc. ("TMF") and TriMedia Film Group, Inc. ("TFG") for the
independent purposes of alternative film development, distribution and
financing.

        In October 2004, TFG and Keydata Media & Marketing 1 LLP ("KMM") entered
into a Sale and Purchase Agreement pursuant to which KMM is entitled to acquire
the rights to exploit any TFG film produced during the eight year term of the
agreement for a period of fifty years in exchange for a licensing fee of
(pound)1000. KMM may exploit the films that it acquires through pay or public
television, theatrical release, airlines, ships or non-theatrical presentations.
As of the date of this report, TFG has not yet produced any films.

        In October 2004, TMF also entered into a Distribution Agreement with KMM
pursuant to which TMF shall have the rights to distribute KMM films for a period
of 15 years and TMF shall pay KMM fifty percent of the gross receipts after
recoupment of participant deferments and distribution expenses. Additionally,
KMM is required to deposit payments into a Printing and Advertising fund in such
amounts as the parties shall agree. This fund shall be used to reimburse TMF for
printing, advertising and exploitation expenses incurred under the agreement.
TMF must provide KMM with a marketing plan and budget for each film and
supporting documentation for each expenditure in order to receive reimbursement
of these expenses. As of January 2005, TMF has received (pound)11,646,835 to be
utilized for printing and advertising of KMM films distributed pursuant to this
Distribution Agreement. TMF has discretion regarding the manner of distribution
for each film. As of the date of this report, KMM has not yet acquired any films
from TFG that can be distributed pursuant to this agreement.

        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 BMG or independent distributors on a territory-by-territory basis.

        On August 24, 2004, we entered into an agreement with Gerry Anderson
Productions PLC ("GAP") pursuant to which we will represent GAP as its agent in
the development and multimedia exploitation of GAP's New Captain Scarlet Series
properties in the United States, Canada and such other territories as are
mutually agreed upon. In connection with this agreement, we have introduced GAP
to Sony Wonder, a group of Sony and they have negotiated a term sheet agreement
regarding the broadcast and master licensing of the New Captain Scarlet Series
pursuant to which GAP will provide Sony Wonder with at least 13 episodes of the
series for the purpose of securing a broadcast arrangement with a major
television network and/or cable television network. In addition, Charles Street,
our co-venture with Sony, will negotiate with artists, develop and produce a
soundtrack CD/DVD for the New Captain Scarlet Series.

MUSIC

        Ruffnation Music operates our music 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

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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 BMG 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 BMG 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 BMG 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
BMG 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 BMG customarily provides such
services to its wholly-owned record labels. If Sony BMG 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 BMG
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 BMG 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 BMG,
with the exception of the independent labels discussed below, unless Sony BMG
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 BMG or Charles Street.
Sony BMG is obligated to license to Charles Street master recordings owned or
controlled by Sony BMG for inclusion in films, home videos and soundtracks.

        Sony BMG 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 BMG out of gross revenues generated
by sales of the recording. Any loans advanced by Sony BMG 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 BMG 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 BMG 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.

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        Independent Label

        Our co-venture agreement with Sony BMG 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.

        The Rock and Pop music genres will enable us to compete in a market
segment comprising approximately 34% 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 approximately 24% of gross business in the
United States record industry. We may seek to develop operations 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

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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;
            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

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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.

        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

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<PAGE>

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.

MUSIC PUBLISHING

        We intend to establish a music publishing operation. 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.

STUDIO OPERATIONS

        Metropolitan operates our studio operations, which provides support for
the in-house recording of our artists. Metropolitan has access to 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 operations will seek to combine technological expertise
and creative, experienced management in the state-of-the-art commercial
recording facilities.

        Metropolitan has access to a studio 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;
            o   two Studer A-827 2-inch tape machines;
            o   two ProTools 5.1 Mix Plus Cubes; and
            o   Quested Q212s monitors.

        Metropolitan also has access to 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. It is our intention to sell studio time when the studios are not in
use for in-house production.

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<PAGE>

                               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 BMG Corp.; 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 2003 to be $11.8 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 2003. 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 87.8 percent of all units shipped in 2003. IFPI reports
that sales of recorded music in 2003 to be largest in the United States, Japan,
United Kingdom, Australia, Germany, France and Canada. The proportion of global
music sales accounted for by the world's top ten markets was 85 percent in 2003.
Globally, music video sales increased by 46.6 percent in 2003, boosted by the
DVD music video, which grew 67 percent. The United States represents
approximately 37 percent of the total world music market. The RIAA reports that,
in 2003, Rock remained the most popular genre of music in the United States with
25.2 percent of the market followed by Rap/Hip-Hop with 13.3 percent, R&B/Urban
with 10.6 percent, Country music with 10.4 percent, Pop with 8.9 percent,
Religious with 5.8 percent, Classical with 3.9 percent and Jazz with 2.9 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 2003 and the industry is
aggressively pursuing strategies to resolve the erosion of unit shipments and
sales in the world market. In 2003, digital copying and Internet piracy have
resulted in an approximate 7.6 percent decline in worldwide revenues as well as
an approximate 6.5 percent decline in units sold worldwide. This decline
continued in 2004.

        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 Outkast, 50 Cent, R.E.M., Ludacris, Alicia Keys 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.

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);

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<PAGE>

            o   Twentieth Century Fox, Sony BMG 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
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

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<PAGE>

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, 2004, we had eight full-time employees 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, 2006
if we do not raise at least $10,000,000 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.

        AS OF OCTOBER 31, 2004, WE HAD APPROXIMATELY $2,165,255 IN INDEBTEDNESS
AND APPROXIMATELY $3,425,599 IN ACCOUNTS PAYABLE AND ACCRUED EXPENSES; IF WE ARE
UNABLE TO SATISFY THESE OBLIGATIONS, THEN OUR BUSINESS WILL BE ADVERSELY
EFFECTED.

        As of October 31, we had indebtedness in the aggregate principal amount
of approximately $2,165,255 and accounts payable and accrued expenses of
approximately $3,425,599. Approximately $5,591,000 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, $1,199,000 of this indebtedness
consists of amounts owed to our Chief Executive Officer pursuant to demand
promissory notes. Approximately $781,613 of this indebtedness consists of
amounts owed to third party lenders pursuant to a promissory note that matures
on October 31, 2005. Approximately $184,602 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
bank. As of January 24, 2005, the outstanding balance of this loan was $129,260.
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 $3,425,599 of accounts payable and
accrued expenses.

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        WE ARE DEPENDENT ON THE OPERATIONS OF CHARLES STREET, A CO-VENTURE WHICH
WE OPERATE WITH SONY BMG, FOR A SUBSTANTIAL PORTION OF OUR REVENUES.

        We entered into a co-venture agreement with Sony BMG, 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 BMG, the final decision regarding whether or not a
particular film project or soundtrack is made through Charles Street is in the
discretion of Sony BMG. If Sony BMG 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
BMG 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 BMG 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 BMG'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.

        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, 2004 totaled
$4,777,612 compared to a net loss of $6,586,034 for the fiscal year ended
October 31, 2003 and a net loss of $890,776 for the ten months ended October 31,
2002. In addition, we had negative working capital of $4,216,349 at October 31,
2004 and experienced negative cash flow from operations of $2,468,710 during the
fiscal year ended October 31, 2004. We expect that production and development,
marketing and operating expenses will increase significantly during 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 2005. 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 affected.

        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

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<PAGE>

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.

        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 or 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 46% 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.

        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

                                       14
<PAGE>

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.

        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.

                                       15
<PAGE>

        WE WILL DEPEND ON THE CONTINUED POPULARITY OF POP OR URBAN MUSIC.

        We plan to produce records in multiple genres of music including pop,
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.

        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

                                       16
<PAGE>

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;
            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:

                                       17
<PAGE>

            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.

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.

                                       18
<PAGE>

ITEM 2.     DESCRIPTION OF PROPERTY

        Our corporate headquarters is located at 1080 N. Delaware Avenue,
Philadelphia, Pennsylvania 19125 and occupies approximately 10,500 square feet
of space under a four-year lease agreement that expires on December 31, 2008. We
are obligated to pay rent of $9,625 per month during the first two years of the
term of this lease agreement and $10,500 per month during the last year of the
term of this lease agreement. We have an option to extend the lease for a period
of two years after the end of the initial term at a monthly rent of $10,815
during the first year of the extension and a monthly rent of $11,139 during the
second year of the extension.

        In November 2004, we assigned our rights under our existing office lease
for 101 Charles Drive, Bryn Mawr, Pennsylvania to Handel Tucker, an unaffiliated
party who has agreed to assume our obligations under this lease. As part of this
agreement, we agreed to maintain our recording studio equipment and fixtures at
these premises throughout the term of the assumed lease. The assignee has the
right to use the recording studio for 21 days per month and we retain the right
to use the recording studio for all remaining days in any calendar month
provided that we are required to provide the assignee with no less than 30 days
notice of our intent to use the recording studio for three or more consecutive
calendar days. We are obligated to pay one third of all costs of maintaining the
recording studio equipment and fixtures in good working order as well as one
third of all utilities costs and the cost of the security system on the
premises.

        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 2004.

                                     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, 2004 and October 31, 2003 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, 2004    High Bid    Low Bid
----------------------------------    --------    -------
Quarter ended:
    January 31, 2004                  $   2.84    $   .99
    April 30, 2004                        2.54       1.27
    July 31, 2004                         1.70        .64
    October 31, 2004                       .89        .51

                                       19
<PAGE>

Fiscal Year ended October 31, 2003    High Bid    Low Bid
----------------------------------    --------    -------
Quarter ended:
    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

The above quotations reflect inter-dealer prices, without retail mark-up,
markdown or commission and may not reflect actual transactions. On January 26,
2005, the closing bid price for our common stock was $0.33 per share.

Holders

        As of January 27, 2005, we had 57 stockholders of record of our common
stock. Such number of record holders was derived from the records maintained by
our transfer agent, Stocktrans, Inc. We estimate that there are approximately
6,000 stockholders holding their shares in nominee name.

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 that 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 vested on October 9, 2004 at an exercise price of
                $0.75 per share;
            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.

        On March 23, 2004, pursuant to the Employment Agreement that we entered
into with Daniel J. B. Taylor, we granted Mr. Taylor the option to purchase up
to 6,000,000 shares of our common stock pursuant to Section 4(2) of the
Securities Act. The exercise price per share of these options is $1.75, the
closing price of our common stock on date of Mr. Taylor's employment agreement.
Mr. Taylor's options vest as follows:

            o   2,000,000 shares vested upon the commencement of Mr. Taylor's
                employment on March 23, 2004;
            o   2,000,000 shares vest upon the completion and funding of an
                initial public offering of our common stock in the United
                Kingdom; and
            o   2,000,000 shares vest upon completion of ten films by the
                Company in a form which can reasonably be regarded as being
                capable of being exhibited or sold in DVD format to the general
                public.

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

        Neither of these compensation arrangements has been approved by our
stockholders. There were no other securities authorized for issuance under
equity compensation plans at January 26, 2005.

                                       20
<PAGE>

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
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 $168,787, was converted into 168,787 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

                                       21
<PAGE>

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.

        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.

        In February and March 2004, we issued and sold an aggregate of 1,090,000
shares of our common stock at an offering price of $1.00 per share to four
accredited investors pursuant to Rule 506 promulgated under the Securities Act.
Additionally, in March 2004, we received a subscription for the sale of 75,000
shares of our common stock at an offering price of $1.00 per share. These shares
were subsequently issued in May 2004 to one accredited investors pursuant to
Rule 506 promulgated under the Securities Act.

        On March 23, 2004, we entered into an employment agreement with Daniel
J. B. Taylor. Pursuant to the terms of the employment agreement Mr. Taylor was
appointed as our President and Chief Executive Officer of European Operations
and we granted Mr. Taylor the option to purchase up to 6,000,000 shares of our
common stock pursuant to Section 4(2) of the Securities Act. The exercise price
for these options is $1.75 per share, the closing price of shares of our common
stock on March 23, 2004 and is subject to adjustment based on the market price
of our shares of common stock. Upon the execution of the employment agreement,
options immediately vested to purchase 2,000,000 share of our common stock. In
addition, options to purchase 2,000,000 shares of our common stock vest upon the
completion and funding of an initial public offering of our shares of common
stock in the United Kingdom and options to purchase 2,000,000 shares of our
common stock vest upon our completion of ten films in a form which can
reasonably be regarded as being capable of being exhibited or sold in DVD format
to the general public. In order to exercise each of the foregoing tranches of
these options, Mr. Taylor must be employed by us on the vesting dates pursuant
to the terms of the employment agreement.

        In April 2004, we issued a Stock Purchase Warrant to purchase 121,875
shares of our common stock at an exercise price of $1.00 per share pursuant to
Section 4(2) of the Securities Act to Middle Fork Investments Ltd. in exchange
for financing services. The warrant is exercisable until April 5, 2007.

        In April 2004, we issued a Stock Purchase Warrant to purchase 2,500
shares of our common stock at an exercise price of $1.00 per share pursuant to
Section 4(2) of the Securities Act to Middle Fork Investments Ltd. in exchange
for financing services. The warrant is exercisable until April 5, 2007.

        In June 2004, we issued a Stock Purchase Warrant to purchase 50,000
shares of our common stock at an exercise price of $1.06 per share pursuant to
Section 4(2) of the Securities Act to Larry Feinstein in exchange for services.
The warrant is exercisable until June 1, 2007.

        In June 2004, we issued a Stock Purchase Warrant to purchase 62,500
shares of our common stock at an exercise price of $.80 per share pursuant to
Section 4(2) of the Securities Act to K. David Stevenson as an inducement to
provide us with a loan in the principal amount of $50,000. The warrant is
exercisable until June 25, 2007 and the loan is documented by a promissory note
that accrues interest at the rate of 10% per annum and is payable upon demand.

                                       22
<PAGE>

        In August 2004, we issued a Stock Purchase Warrant to purchase 62,500
shares of our common stock at an exercise price of $.80 per share pursuant to
Section 4(2) of the Securities Act to K. David Stevenson as an inducement to
provide us with a loan in the principal amount of $50,000. The warrant is
exercisable until August 13, 2007 and the loan is documented by a promissory
note that accrues interest at the rate of 10% per annum and is payable upon
demand.

        On August 24, 2004, we entered into the agreement with GAP pursuant to
which we will represent GAP as its agent in the development and multimedia
exploitation of GAP's New Captain Scarlet Series properties in the United
States, Canada and such other territories as are mutually agreed upon. Pursuant
to the terms of the agreement, GAP has purchased, in several transactions, an
aggregate of 1,505,539 shares of our common stock at an aggregate purchase price
of $978,600. We sold these shares of common stock pursuant to Rule 506
promulgated under the Securities Act of 1933, as amended.

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 has film and music
operations. 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 BMG. 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. While we continued to recognize revenues from Snipes in
Fiscal 2004, we did not recognize the same level of revenues that we recognized
in Fiscal 2003. We have recently re-released Snipes as a combination DVD/CD
package through Charles Street. In Fiscal 2005, we also plan to distribute Train
Ride, a film produced by a third party, and to commence production of our new
movie, Four Point Play. We also anticipate assisting GAP in the multimedia
exploitation of the New Captain Scarlet series.

        Since October 31, 2004, we have received net proceeds of approximately
$141,921 from private placement offerings and a payment of $1,468,035 from TM
Film Distribution as payment of costs and expenses in connection with its
formation and its activities in connection with the structuring of transactions
with KeyData Media & Marketing 1, LLP. Despite these cash receipts, we presently
do not have sufficient cash to implement our business plan. We have experienced
this lack of liquidity throughout Fiscal 2003 and Fiscal 2004, causing us to be
unable to produce any additional feature films. We believe that we need to raise
or otherwise obtain at least $10,000,000 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
2005, 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 complete the projects we have planned for
Fiscal 2005 or continue to implement our business plan.

        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,

                                       23
<PAGE>

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.

        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, 2004 (Fiscal 2004) vs. Year Ended October 31, 2003
(Fiscal 2003)

<TABLE>
<CAPTION>
                                          FISCAL 2004    FISCAL 2003      $CHANGE
                                          -----------    -----------    -----------
<S>                                        <C>            <C>            <C>
Net Loss                                   (4,777,612)    (6,586,034)    (1,808,422)
Net Loss From Operations                   (4,782,312)    (6,612,954)    (1,830,642)
Net Revenues                                  239,070      1,102,060       (862,990)
Direct Costs                                   41,314      3,897,664     (3,856,350)
</TABLE>

                                       24
<PAGE>

<TABLE>
<CAPTION>
                                          FISCAL 2004    FISCAL 2003      $CHANGE
                                          -----------    -----------    -----------
<S>                                         <C>            <C>            <C>
Operating Expenses                          4,980,068      3,817,350      1,162,718
Other Income                                    4,700         26,920        (22,220)
</TABLE>

        The decrease in Net Loss From Operations in Fiscal 2004 was primarily
due a decrease in amortization of capitalized film costs associated with the
film Snipes of $3,694,162 and lower capitalized film costs in Fiscal 2004 due to
the fact that we had decreased production activity in Fiscal 2004.

        The decrease in Net Revenues in Fiscal 2004 was due to the fact that we
did not release any new films in Fiscal 2004 and we generated substantially all
revenue that we expect to generate with respect to the original release of the
Snipes DVD in Fiscal 2003. We recently re-released Snipes and presently expect
to distribute Train Ride, a film produced by a third party, in Fiscal 2005.

        The decrease in Direct Costs for Fiscal 2004 was mainly the result of
the amortization of $3,694,162 of capitalized film costs associated with the
Snipes film in Fiscal 2003 and decreased production activity in Fiscal 2004 due
to our lack of liquidity. 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 2004 was primarily due to
an increase of $ 197,753 due to the establishment and operation of our European
office, an increase of $205,168 due to fees and expenses incurred in connection
with financings, an increase of $673,205 due to a loss on impairment of the
recording studio leasehold improvements, an increase of $554,131 in salary
expense due to our hiring of additional employees and an increase of $201,829 in
travel and entertainment expenses incurred due to domestic and international
business development and financing activities. These increased expenses were
offset by a decrease of $91,409 in consulting expenses, a decrease of $350,629
in professional fees and a decrease of $171,449 in interest expense, which
reflects the fact that the Trident loan was repaid in Fiscal 2004 and there was
a significant decrease in the interest rate on $435,000 of term loans. Operating
Expenses are generally the costs of operating our business and include salaries,
advertising, professional and consulting fees, rent and utilities and travel.


OFF-BALANCE SHEET ARRANGEMENTS

        There were no off-balance sheet arrangements during the fiscal year
ended October 31, 2004 that have, or are reasonably likely to have a current or
future effect on our financial condition, changes in financial condition,
revenues or expenses, results of operations, liquidity, capital expenditures or
capital resources that is material to our interests.


CHANGES IN FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES

<TABLE>
<CAPTION>
                                           FISCAL 2004    FISCAL 2003      $CHANGE
                                          -------------   -----------   -------------
<S>                                       <C>             <C>           <C>
Cash Flows From Operating Activities      $  (2,468,710)  $  (252,411)  $  (2,216,299)
Cash Flows From Investing Activities             86,943        19,234          67,709
Cash Flows From Financing Activities          2,552,778       219,493       2,333,285
</TABLE>

        The use of cash from operations in Fiscal 2004 was due primarily to our
Net Loss and a decrease in advances from Sony, principally offset by non-cash
charges for depreciation and amortization of $188,897, loss on impairment of
$673,205, an increase in amounts payable and accrued expenses of $1,107,590,
warrants issued for services and accounting fees of $247,300 and stock issued in
payment of expenses of $222,500.

        In Fiscal 2004, cash provided by investing activities represented monies
advanced to us by our principal stockholder. In Fiscal 2004, financing
activities provided $123,000 from the issuance of demand notes payable and
$2,501,683 from the sale of or common stock.

        At October 31, 2004, we had approximately $185,096 in cash. At January
26, 2005, we had approximately $386,461 in cash. We do not believe that the
amount of cash that we had on hand at January 26, 2005 is sufficient to fund our
operations through January 31, 2006. We have principally relied on equity
financing and loans from our principal stockholder, distributions from Charles
Street, our co-venture with Sony BMG, and third party lenders to fund our
operations. During Fiscal 2005, 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 and will consider
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 discussions with a United Kingdom
broker regarding a potential listing on the Alternative Investment Market
("AIM") in London. 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 $10,000,000 in order to meet

                                       25
<PAGE>

our anticipated cash requirements through January 31, 2006. 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.

        On December 27, 2004, TM Film Distribution, Inc., our wholly-owned
subsidiary, entered into a Loan Agreement with Fairbairn Private Bank Limited
(the "Loan Agreement"). The Loan Agreement established a loan facility in the
maximum aggregate principal amount of (pound)1,628,055 (the "Facility") that TM
Film Distribution may draw down from time to time. To date, TM Film Distribution
has drawn down (pound)1,500,000 of this Facility. Interest accrues for each
advance under the Facility at the rate of LIBOR on the date of the advance plus
0.375%. Pursuant to the Loan Agreement, the lender determines LIBOR in its sole
discretion by reference to either (i) the relevant Reuters page at or about
11:00 a.m. (London time) on the date an advance is drawn or (ii) if no such rate
can be ascertained at the relevant time, the rate offered to lender by any
leading bank in the London inter-bank market at or about 11:00 a.m. (London
time) on the date an advance is drawn. Amounts drawn under the Facility are due
for repayment on that date which is 24 months after the date on which the final
draw down of the Facility is made. Interest is payable quarterly during the term
that each advance is outstanding. TM Film Distribution's obligation to repay all
loan amounts under the Facility is secured by a Deed of Charge Over Cash and a
Deed of Charge Over Deposit each created in favor of the lender and covering
funds held on deposit by TM Film Distribution with the lender. These funds are
part of the Printing and Advertising fund established by KMM on behalf of TM
Film Distribution, as more fully described in Business of the Company - Film
Division - Keydata Media & Marketing 1 LLP Distribution Arrangement. On December
27, 2004, we received a payment of $1,468,035 from TM Film Distribution as
payment of costs and expenses in connection with its formation and its
activities in connection with the structuring of transactions with KeyData Media
& Marketing 1, LLP.

        In August 2004, we engaged Brockington Securities, Inc. as our financial
advisor and investment banker pursuant to which we issued them 250,000 shares of
our common stock. In February 2005, we expect to receive $270,000 (net of
commissions of $30,000) from a private placing offering for which Brockington
acted as placement agent.

        We derived a significant portion of our net revenues in Fiscal 2003 and
Fiscal 2004 from our Charles Street joint venture related to the sale of the
feature film Snipes, which was released on DVD/Home Video by Sony BMG on
February 25, 2003. In Fiscal 2004, there was a significant decrease in net
revenues due to the decline in revenues from Snipes and our failure to release
any new movies or entertainment content. Under the terms of the co-venture
agreement with Sony BMG, as amended on October 2, 2003, Ruffnation Films will
fund the creation, production and marketing of ten films for Charles Street.
Snipes was the first film we produced under the agreement. Sony BMG will advance
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 BMG from the sales of
products released by Charles Street. Sony BMG has the right to accept or reject
any film in its discretion. Substantially all of the $1,149,584 in Net Revenues
which we generated in Fiscal 2003 and the $239,070 of Net Revenues which we
generated in Fiscal 2004 represented revenues primarily from sales to rental
outlets and limited retail sales of the feature film Snipes.

        Through June 30, 2004, Sony BMG has reported gross billings for Charles
Street related to the release of the Snipes DVD/Home Video of $2,441,323 and net
profits of $1,149,557, of which our portion is $953,627. As of the date of this
report, we have not received additional financial information from Sony BMG
relating to amounts due to Charles Street for Snipes. We anticipate receiving
financial information from Sony BMG relating to Charles Street for the period
ending December 31, 2004, however, we do not anticipate receiving significant
additional revenues related to Snipes. Although we may receive additional
payments from Charles Street in Fiscal 2005 related to sales of Snipes, there
can be no assurance of the amount or timing of such payments.

        On August 24, 2004, we entered into an agreement with Gerry Anderson
Productions PLC ("GAP") pursuant to which we will represent GAP as its agent in
the development and multimedia exploitation of GAP's New Captain Scarlet Series
properties in the United States, Canada and such other territories as are
mutually agreed upon. In connection with this agreement, we have introduced GAP
to Sony Wonder, a group of Sony and they have negotiated a term sheet agreement
regarding the broadcast and master licensing of the New Captain Scarlet Series
pursuant to which GAP will provide Sony Wonder with at least 13 episodes of the
series for the purpose of securing a broadcast arrangement with a major
television network and/or cable television network. In addition, Charles Street,
our co-venture with Sony, will negotiate with artists, develop and produce a
soundtrack CD/DVD for the New Captain Scarlet Series.

                                       26
<PAGE>

        As consideration for services provided under this agreement, we will
receive a fee equal to five percent of the gross cash receipts realized by GAP
from Sony's exploitation of the New Captain Scarlet Series (excluding revenues
generated by sub-agents or distributors appointed by Sony, if any). In addition,
GAP is obligated to purchase an aggregate of 1,538,462 shares of our common
stock in a private placement offering at an aggregate purchase price of
$1,000,000. During the period from September 2004 through January 2005, GAP
purchased 1,505,539 of these shares and remains obligated to purchase 32,923
shares of our common stock. Pursuant to the agreement, we also have a five-year
option to purchase up to $1,000,000 of GAP's capital stock at a 15% discount to
the value of the shares on the date that the option is exercised.

        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.

        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 in 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 25, 2005 was approximately $129,260. The original
maturity date of the loan was 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. 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. On May 10, 2004,
the bank demanded payment in full of the outstanding principal balance of the
loan plus all accrued interest on the loan in the approximate amount of $14,500
for the aggregate amount of approximately $147,100 by August 17, 2004. We are
currently negotiating terms for an extension of this payment deadline. As we
presently do not have sufficient cash on hand to repay this loan, we may be
faced with the bank's 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. The total outstanding
amount of this note is reflected as a current liability in our October 31, 2004
Consolidated Balance Sheet.

        In addition, we have accounts payable and accrued expenses in the
aggregate amount of approximately $3,425,599 that are presently past due.

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

        In June 2004, we received short-term loans in the aggregate amount of
$90,000 from a third party. These obligations are documented by promissory notes
that accrue interest at the rate of 10% per annum and are payable upon the
earlier of our receipt of $1,500,000 in additional financing or July 1, 2005.

        In June 2004 and August 2004, we received short-term loans in the
aggregate amount of $100,000 from a third party. These obligations are
documented by promissory notes that accrue interest at the rate of 10% per annum
and are payable upon demand. As an inducement for the loans we issued the lender
warrants to purchase 125,000 shares of common stock at a price per share of $.80
with a term of three years.

                                       27
<PAGE>

        On April 11, 2003, Snipes cancelled a $400,000 promissory note, a
$25,000 promissory note and $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 accrued 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 June 2, 2004, the promissory note was further amended to extend the
maturity date from April 30, 2004 until September 30, 2004. As of June 2, 2004,
the outstanding principal and accrued interest on the promissory note was
$654,906. For the period from June 2, 2004 until September 30, 2004, the
interest rate on the promissory note was reduced from 35% to 20% and accrued on
the balance of $654,906. In January 2005, the promissory note was further
amended to extend the maturity date from September 30, 2004 until September 30,
2005. 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.

        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 that 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 that bears interest at 12% per annum. In August 2003, we
repaid $35,000 of these loans and $61,602 presently remains outstanding.

        We have received loans in the aggregate principal amount of $1,100,000
from Christopher Schwartz, our Chairman, Chief Executive Officer 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 2004, Mr.
Schwartz, extended short-term loans in an aggregate principal amount of $325,040
to us and our operating subsidiaries. We have repaid $226,000 of the principal
amount of these loans.

        Accordingly, approximately $5,500,000 from the net proceeds of any
additional financing will be used to satisfy our existing loans and obligations
that 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 $10,000,000 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 $10,000,000, 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. Accordingly, our stockholders
may only receive income from the appreciation in our stock price, if any.

                                       28
<PAGE>

ITEM 7.     FINANCIAL STATEMENTS

        Our consolidated financial statements for Fiscal Years 2004 and 2003 and
footnotes related thereto are included within Item 13(a) of this report and may
be found at pages F-1 through F-21.

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.

ITEM 8A.    CONTROLS AND PROCEDURES

        EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

        As of October 31, 2004, 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 then Chief Financial
Officer. Based upon that evaluation, Mr. Schwartz concluded that our disclosure
controls and procedures are effective. There were no significant changes in our
disclosure controls and procedures that have materially affected or are
reasonably likely to materially affect our internal controls over financial
reporting during the quarter ended October 31, 2004.

        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 AND EXECUTIVE OFFICERS; 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 26, 2005.

                                       29
<PAGE>

        Name                     Age   Current Position(s) with Company
        --------------------     ---   --------------------------------------
        Christopher Schwartz     44    Chief Executive Officer, Treasurer and
                                       Director

        Daniel J.B. Taylor       45    President

        Shawn Taylor             42    Chief Financial Officer

        Richard Murray           46    President of Ruffnation Films LLC

        Ernest J. Cimadamore     43    Secretary, President of Ruffnation
                                       Music, Inc.

        Joseph Safina            37    Vice Chairman

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 OF THE BOARD OF DIRECTORS 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 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.

        DANIEL J.B. TAYLOR, PRESIDENT - Mr. Taylor was appointed our President
in March 2004. He comes to TriMedia from Grosvenor Park Group in London, an
arranger of financing and provider of co-production services to the film
industry. As the co-founder and CEO of Grosvenor Park Media Limited, Mr. Taylor
is responsible for managing the Grosvenor Park London based staff of 22
professionals engaged in film production, structured-finance, legal affairs,
accounting and fund raising. Mr. Taylor has overseen the raising of over $1.8
billion in film financing by Grosvenor Park Media Limited. Prior to founding
Grosvenor Park Media, Mr. Taylor, a graduate of Stanford University, held
various corporate positions including positions at Bank of America and First
Boston. Additionally, he has served on the boards of directors of various United
Kingdom AIM listed companies and has obtained extensive experience in corporate
finance and corporate governance. AIM is the London Stock Exchange's global
market for smaller, growing companies, which is operated, regulated and promoted
by the London Stock Exchange.

        SHAWN TAYLOR, CHIEF FINANCIAL OFFICER - In November 2004, Mr. Taylor was
appointed as our Chief Financial Officer. Mr. Taylor with over ten years
experience in executive finance and accounting positions within the
entertainment industry, will oversee all financial operations and financial
reporting, budgeting and strategic planning, treasury operations and asset
management. After qualifying with Pannell Kerr Forster in London, Mr. Taylor
joined United News & Media PLC in 1991 as a Group Accountant. In 1994, he joined
ITEL, an international distributor of television programming created through a
joint venture between Time Warner Inc. and

                                       30
<PAGE>

United News & Media PLC. At ITEL, Mr. Taylor was responsible for recruiting a
new finance team and establishing procedures, controls and accounting policies
for the rapidly growing company. In 1998, Mr. Taylor joined HIT Entertainment
PLC, an AIM listed, intellectual property company, owners of Bob the Builder,
Barney, Thomas the Tank Engine and other children's characters. Mr. Taylor was
there through a period of significant growth, and was responsible for all
financial reporting, banking and financing activities. He oversaw all foreign
exchange, treasury management, taxation, corporate governance and investor
relations. In 2001 Mr. Taylor moved to Winchester Entertainment Plc as CFO. In
March 2004 and as its Acting CEO, Mr. Taylor disposed of the Winchester
Entertainment business to Content Film Inc. in a reverse takeover.

        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.

        JOSEPH SAFINA, VICE CHAIRMAN OF BOARD OF DIRECTORS - Mr. Safina was
appointed to our Board of Directors in December 2004. Mr. Safina has over 15
years investment banking experience. He served as Chairman of Nichols, Safina
Lerner & Co. a New York based investment banking firm until 1997 and has been
providing strategic consulting services to public and private companies for the
past five years. From 1989 to 1997, he was a senior vice president of Gruntal &
Co., a New York Stock Exchange Member Firm. From 1997 to 2003, Mr. Safina was
the CEO of International Equities Group, a Florida based merchant
banking/consulting firm. Mr. Safina also was the founder and CEO of Orion
Capital Markets. Mr. Safina is currently the CEO of Pure Entertainment. Pure
Entertainment is a Miami-based record label and media company.

        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.

        In Fiscal 2004, Dan Taylor was deficient in filing a Form 3 required by
Section 16(a) of the Securities Exchange Act relating to his appointment as
President and the grant of options to purchase 6,000,000 shares of our common
stock pursuant to the terms of his employment agreement with us. In Fiscal 2004,
Mr. Cimadamore was deficient in filing a Form 4 required by Section 16(a) of the
Securities Exchange Act relating to his disposition of 450,000 shares of our
common stock.

                                       31
<PAGE>

        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, and was traditionally the sole member of our Board of
Directors, President, Chief Executive Officer and Chief Financial Officer, we
did not believe that a formal written Code of Ethics was necessary to regulate
his conduct. Now that we have appointed additional executive officers we are in
the process of establishing a formal written Code of Ethics governing the
conduct of our executive officers. We anticipate that the Board of Directors
will adopt a Code of Ethics during the second quarter of Fiscal 2005.

        AUDIT COMMITTEE FINANCIAL EXPERT

        We do not presently have a member of the Board of Directors who
qualifies as an "audit committee financial expert" under the SEC's rules. We are
presently conducting a search for additional directors, at least one of whom we
anticipate will meet the requirements of an audit committee financial expert.

ITEM 10.    EXECUTIVE COMPENSATION

        The following table sets forth compensation paid or accrued during the
fiscal year ended October 31, 2004 ("Fiscal 2004") and 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
                                                                     ---------------------    -------------------
                                                                                                   Number of
Name and Principal Position                      Fiscal Year Ended     Salary      Bonus            Options
---------------------------------------------    -----------------   ---------   ---------    -------------------
<S>                                               <C>                <C>         <C>               <C>
Christopher Schwartz (1)                          October 31, 2004   $ 332,750   $       0                 0
Chief Executive Officer, President, Treasurer     October 31, 2003   $ 302,500   $       0                 0
 Treasurer                                        October 31, 2002   $       0   $       0         5,786,707

Daniel J.B. Taylor (2)                            October 31, 2004   $ 300,000   $       0         6,000,000
President, Chief Executive Officer of             October 31, 2003   $       0   $       0                 0
European Operations                               October 31, 2002   $       0   $       0                 0


Richard Murray (3)                                October 31, 2004   $ 221,834   $       0                 0
President of Ruffnation Films LLC                 October 31, 2003   $ 201,667   $       0                 0
                                                  October 31, 2002   $       0   $       0                 0

Ernest J. Cimadamore (4)                          October 31, 2004   $ 221,834   $       0                 0
President of Ruffnation Music, Inc.               October 31, 2003   $ 201,667   $       0                 0
                                                  October 31, 2002   $       0   $       0                 0
</TABLE>

----------
(1)  Substantially all of Mr. Schwartz's Fiscal 2003 and Fiscal 2004 salary
     represents accrued expenses as of the date of this report.

(2)  Mr. Taylor was appointed our President and Chief Executive Officer of our
     European operations March 2004. He was paid $234,410 of his salary in
     Fiscal 2004 and the remaining amount represents accrued expenses as of the
     date of this report.

(3)  Mr. Murray was paid his entire outstanding unpaid Fiscal 2003 salary and
     $61,751 of his Fiscal 2004 salary. The remaining salary for Fiscal 2004
     represents accrued expenses as of the date of this report.

(4)  Mr. Cimadamore was paid a portion of his outstanding unpaid Fiscal 2003
     salary and none of his Fiscal 2004 salary. The remaining salary for Fiscal
     2003 and Fiscal 2004 represents accrued expenses as of the date of this
     report.

                                       32
<PAGE>

        Option Grants For the Fiscal Year Ended October 31, 2004

        We did not grant any stock options during Fiscal 2003. No options were
exercised by any of our executive officers in Fiscal 2004.

        The following table sets forth information concerning year-end option
values for Fiscal 2004 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 of $0.62 on
October 29, 2004, the last trading day in Fiscal 2004.

                          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       2,482,500(1)      3,304,207   $         0   $           0
Daniel J.B. Taylor         2,000,000(2)      4,000,000   $         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, options to purchase 825,000 shares of
     common stock at an exercise price of $1.09 per share and 907,500 shares of
     common stock at an exercise price of $0.79 per share.

(2)  Consists of options to purchase 750,000 shares of our common stock at an
     exercise price of $1.75 per share.

        Long Term Incentive Plans

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

        Compensation of Directors

        Our directors are not compensated for any services provided as a
director.

        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. Pursuant to the Employment Agreement, Mr. Schwartz is
entitled to receive an initial 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. His annual salary has since been increased to
$360,000 per annum. 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.

        On March 23, 2004, we entered into a two-year Employment Agreement with
Daniel J.B. Taylor that commenced on April 12, 2004. Pursuant to the terms of
the Employment Agreement, Mr. Taylor serves as our President and Chief Executive
Officer of our European operations and shall be considered for appointment to
our board of directors and the next annual meeting of our stockholders. Mr.
Taylor is entitled to receive an annual base

                                       33
<PAGE>

salary of $540,000 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. Taylor 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.
Taylor is also entitled to receive options to purchase 6,000,000 shares of our
common stock. If we terminate the employment of Mr. Taylor without cause, due to
a long-term disability, or as a result of his death or if Mr. Taylor 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. If we terminate the employment of
Mr. Taylor without cause or if Mr. Taylor terminates his employment for good
reason, as such terms are defined in the employment agreement, he is entitled to
receive his base salary for the longer of (i) twelve months or (ii) the
remaining term of the Employment Agreement. In addition, during this period, Mr.
Taylor shall be entitled to receive continued coverage under employee benefits
plans and programs as they exist on his termination date and job placement
assistance and services at a cost not to exceed (pound) 3000.

        On October 8, 2004, we entered into a letter agreement with Shawn Taylor
pursuant to which he presently serves as our chief financial officer. The
initial term of this agreement is six months. Mr. Taylor is entitled to receive
a salary of (pound)60,000 plus a pension contribution and a car allowance
totaling (pound)12,000. These amounts are payable in six monthly installments
of (pound)12,000 plus 12.9% to cover any applicable taxes in the United Kingdom.
Upon completion of this six-month term, we are obligated to issue Mr. Taylor
warrants to purchase 100,000 shares of our common stock at an exercise price of
$1.00 per share. Pursuant to this letter agreement, we have also agreed to enter
into a one-year employment agreement with Mr. Taylor, the term of which will
begin in May 2005. We have agreed to pay Mr. Taylor an annual salary of
(pound)120,000 plus contributions to a pension fund, a car allowance and health
insurance. We have also agreed to award Mr. Taylor options to purchase up to
1,500,000 shares of our common stock that will vest in stages upon satisfaction
of certain milestones.

        CONSULTING AGREEMENT

        In December 2004, we entered into a consulting agreement with Joseph
Safina. The term of the agreement is twelve months, after which it shall
automatically renew for successive one-month periods unless either party
provides written notice at least ten business days prior to the expiration of
the then current period that it wishes to terminate the agreement. As
compensation for services provided pursuant to this agreement, Mr. Safina is
entitled to receive:

            o   On the date of the consulting agreement, warrants to purchase
                1,000,000 shares of our common stock at an exercise price of
                $.49 per share, which was the closing bid price of our common
                stock as quoted on the Over-the Counter Bulletin Board (the
                "OTCBB") on December 21, 2004;

            o   On the date on which we complete an equity offering of at least
                $10,000,000, warrants to purchase 1,000,000 shares of our common
                stock at an exercise price equal to the closing bid price of our
                common stock as quoted on the OTCBB on such date, provided that,
                Mr. Safina must still be performing all duties required pursuant
                to the consulting agreement on such date; and

            o   On the first anniversary of the date of the consulting
                agreement, warrants to purchase 1,000,000 shares of our common
                stock at an exercise price equal to the closing bid price of our
                common stock as quoted on the OTCBB on such date, provided that,
                Mr. Safina must still be performing all duties required pursuant
                to the consulting agreement on such date.

        Pursuant to this agreement, Mr. Safina has agreed to perform the
following duties:

            o   Assist management in designing a strategic operational plan;
            o   Design and implement a strategy to position us in the domestic
                and international financial markets to complete an offering of
                our securities;
            o   Assist management in evaluating, financing and negotiating
                mergers and acquisitions;
            o   Assist management in developing corporate finance, governance
                and administrative policy; and
            o   Serve on our board of directors in the capacity of Vice
                Chairman.

        Repricing of Options

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

                                       34
<PAGE>

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

        The following table sets forth, as of January 27, 2005, certain
information with respect to beneficial ownership of our common stock as of
January 27, 2005 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 27, 2005, 29,729,650
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)                                        19,232,500         45.6
1080 N. Delaware Avenue, 8th Floor
Philadelphia, PA 19125

Daniel J.B. Taylor(3)                                           2,000,000          6.3
53-54 Grosvenor Street
London WIK3HU UK

Shawn Taylor(4)                                                         0            *
53-54 Grosvenor Street
London WIK3HU UK

Ernest Cimadamore(5)                                                    0            *
1080 N. Delaware Avenue, 8th Floor
Philadelphia, PA 19125

Richard Murray(6)                                                       0            *
1080 N. Delaware Avenue, 8th Floor
Philadelphia, PA 19125

Joseph Safina(7)                                                1,000,000          3.3
1080 N. Delaware Avenue, 8th Floor
Philadelphia, PA 19125

All directors and executive officers as a group                22,232,500         49.1
(6 people)(8)
</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)  Chairman of the Board and Chief Executive Officer. Includes 2,635,000
     shares of common stock held in escrow for Christopher Schwartz by Erskine,
     Wolfson & Gibbon. Also includes 10,000,000 shares of common stock issuable
     upon conversion of 1,000,000 shares of Series A Convertible Preferred Stock
     and 2,482,500 shares of common stock that are issuable upon exercise of
     vested stock options held by Mr. Schwartz.

                                       35
<PAGE>

(3)  President. Includes 2,000,000 shares of common stock that are issuable upon
     exercise of vested stock options held by Mr. Taylor.
(4)  Chief Financial Officer.
(5)  President of Ruffnation Music, Inc.
(6)  President of Ruffnation Films LLC.
(7)  Vice Chairman of the Board of Directors. Includes 1,000,000 shares of
     common stock that are issuable upon exercise of vested stock options held
     by Mr. Safina.
(8)  Includes (i) 10,000,000 shares of common stock issuable upon conversion of
     1,000,000 shares of Series A Convertible Preferred Stock and 2,482,500
     shares of common stock that are issuable upon exercise of vested stock
     options held by Mr. Schwartz, (ii) 2,000,000 shares of common stock that
     are issuable upon exercise of vested stock options held by Mr. Taylor and
     (iii) 1,000,000 shares of common stock that are issuable upon exercise of
     vested stock options held by Mr. Safina.

ITEM 12.    CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

        We have received loans in the aggregate principal amount of $1,199,040
from Christopher Schwartz, our Chief Executive Officer, sole director and
principal stockholder. $1.1 million of 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
the entire principal amount of these loans. During Fiscal 2004, Mr. Schwartz
extended short-term loans in an aggregate principal amount of $325,040 to us and
our operating subsidiaries. These obligations have not been documented and are
due on demand. We have repaid $226,000 of the principal amount of these loans.

        In March 2004, we committed to pay an initial annual operating budget of
(pound)200,000 to Grosvenor Park Media Ltd. ("Grosvenor") for the establishment
of our European headquarters in London. This budget includes office rent,
support staff and related services. Daniel J.B. Taylor, our President and Chief
Executive Officer of European Operations, is Managing Director of Grosvenor and
Grosvenor's offices are presently serving as our European headquarters.

        In December 2004, we entered into a letter of intent with Joseph Safina,
the Vice Chairman of our Board of Directors, to form a joint venture to develop
the Battle Rap Video brand for entertainment content including online
interactive gaming, merchandise, film and music productions and television
programming and other business opportunities for worldwide distribution. We will
own 50% of the joint venture and Mr. Safina will own 50% of the joint venture.
Chris Schwartz and Mr. Safina shall jointly manage the joint venture and shall
approve all projects and operating budgets. In consideration for Mr. Safina's
contribution of the Battle Rap properties to the joint venture, we will issue to
Mr. Safina 2,000,000 shares of our common stock and warrants to purchase
1,000,000 shares of our common stock at an exercise price of $0.45 per share.
This joint venture is contingent on the parties negotiating and entering into a
definitive agreement setting forth all terms and conditions of this joint
venture.

        In December 2004, we entered into a consulting agreement with Joseph
Safina, the Vice Chairman of our Board of Directors. The term of the agreement
is twelve months, after which it shall automatically renew for successive
one-month periods unless either party provides written notice at least ten
business days prior to the expiration of the then current period that it wishes
to terminate the agreement. As compensation for services provided pursuant to
this agreement, Mr. Safina is entitled to receive:

            o   On the date of the consulting agreement, warrants to purchase
                1,000,000 shares of our common stock at an exercise price of
                $.49 per share, which was the closing bid price of our common
                stock as quoted on the Over-the Counter Bulletin Board (the
                "OTCBB") on December 21, 2004;

            o   On the date on which we complete an equity offering of at least
                $10,000,000, warrants to purchase 1,000,000 shares of our common
                stock at an exercise price equal to the closing bid price of our
                common stock as quoted on the OTCBB on such date, provided that,
                Mr. Safina must still be performing all duties required pursuant
                to the consulting agreement on such date; and

            o   On the first anniversary of the date of the consulting
                agreement, warrants to purchase 1,000,000 shares of our common
                stock at an exercise price equal to the closing bid price of our
                common

                                       36
<PAGE>

                stock as quoted on the OTCBB on such date, provided that,
                Mr. Safina must still be performing all duties required pursuant
                to the consulting agreement on such date.

ITEM 13.    EXHIBITS, LIST AND REPORTS ON FORM 8-K

     (a)    The following Exhibits are filed or incorporated by reference 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).

  10.3      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).

  10.4      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).

  10.5      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).

  10.6      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).

  10.7      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

                                       37
<PAGE>

 EXHIBIT
  NUMBER    DESCRIPTION
 -------    --------------------------------------------------------------------
            the Annual Report on Form 10-KSB for the fiscal year ended
            October 31, 2002 filed on March 17, 2003).

   10.8     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).

   10.9     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).

  10.10     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).

  10.11     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).

  10.12     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).

  10.13     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).

  10.14     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).

  10.15     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).

  10.16     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).

  10.17     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).

  10.18     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).

  10.19     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).

  10.20     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 (incorporated by
            reference to Exhibit 10.30 to the Annual Report on Form 10-KSB for
            the fiscal year ended October 31, 2003 filed on February 13, 2004).

  10.21     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 (incorporated by reference to
            Exhibit 10.31 to the Annual Report on Form 10-KSB for the fiscal
            year ended October 31, 2003 filed on February 13, 2004).

  10.22     Warrants to purchase 10,000 shares of common stock issued to Trident
            Growth Fund, L.P. dated September 11, 2003 (incorporated by
            reference to Exhibit 10.32 to the Annual Report on Form 10-KSB for
            the fiscal year ended October 31, 2003 filed on February 13, 2004).

  10.23     Employment Agreement by and between TriMedia Entertainment Group,
            Inc. and Daniel J.B. Taylor dated March 23, 2004 (incorporated by
            reference to Exhibit 10.1 of the Quarterly Report on

                                       38
<PAGE>

 EXHIBIT
  NUMBER    DESCRIPTION
 -------    --------------------------------------------------------------------
            Form 10-QSB filed on June 15, 2004).

  10.24     Stock Purchase Warrant to purchase 2,500 shares of common stock
            issued to Middle Fork Investments Ltd. dated April 5, 2004
            (incorporated by reference to Exhibit 10.2 of the Quarterly Report
            on Form 10-QSB filed on June 15, 2004).

  10.25     Stock Purchase Warrant to purchase 121,875 shares of common stock
            issued to Middle Fork Investments Ltd. dated April 5, 2004
            (incorporated by reference to Exhibit 10.3 of the Quarterly Report
            on Form 10-QSB filed on June 15, 2004).

  10.26     Agreement dated as of August 12, 2004 by and between Gerry Anderson
            Productions PLC and TriMedia Entertainment Group, Inc. (incorporated
            by reference to Exhibit 10.1 of Current Report on Form 8-K filed on
            September 10, 2004).

  10.27     Stock Purchase Warrant to purchase 50,000 shares of common stock
            issued to Larry Feinstein dated June 1, 2004 (incorporated by
            reference to Exhibit 10.1 of the Quarterly Report on Form 10-QSB
            filed on September 14, 2004).

  10.28     10% Demand Promissory Note in the principal amount of $50,000 issued
            to 1025 Investments, Inc. dated June 1, 2004 (incorporated by
            reference to Exhibit 10.2 of the Quarterly Report on Form 10-QSB
            filed on September 14, 2004).

  10.29     10% Demand Promissory Note in the principal amount of $40,000 issued
            to 1025 Investments, Inc. dated June 14, 2004 (incorporated by
            reference to Exhibit 10.3 of the Quarterly Report on Form 10-QSB
            filed on September 14, 2004).

  10.30     Stock Purchase Warrant to purchase 62,500 shares of common stock
            issued to K. David Stevenson dated June 25, 2004 (incorporated by
            reference to Exhibit 10.4 of the Quarterly Report on Form 10-QSB
            filed on September 14, 2004).

  10.31     10% Demand Promissory Note in the principal amount of $50,000 issued
            to K. David Stevenson dated June 25, 2004 (incorporated by reference
            to Exhibit 10.5 of the Quarterly Report on Form 10-QSB filed on
            September 14, 2004).

  10.32     Stock Purchase Warrant to purchase 62,500 shares of common stock
            issued to K. David Stevenson dated August 13, 2004 (incorporated by
            reference to Exhibit 10.6 of the Quarterly Report on Form 10-QSB
            filed on September 14, 2004).

  10.33     10% Demand Promissory Note in the principal amount of $50,000 issued
            to K. David Stevenson dated August 13, 2004 (incorporated by
            reference to Exhibit 10.7 of the Quarterly Report on Form 10-QSB
            filed on September 14, 2004).

  10.34     Consulting Agreement dated December 21, 2004 by and between TriMedia
            Entertainment Group, Inc. and Joseph Safina (incorporated by
            reference to Exhibit 10.1 of Current Report on Form 8-K filed on
            December 23, 2004).

  10.35     Loan Agreement Between Fairbairn Private Bank Limited and TM Film
            Distribution, Inc. (incorporated by reference to Exhibit 10.1 of
            Current Report on Form 8-K filed on January 5, 2005).

  10.36     Lease Agreement by and between Delpar L.P. and TriMedia
            Entertainment Group, Inc.

  10.37     Sale and Purchase Agreement between TriMedia Film Group, Inc. and
            Keydata Media and Marketing I, LLP dated as of October 2004.

  10.38     Distribution Agreement between Keydata Media and Marketing I, LLP
            and TM Film Distribution, Inc. dated as of October 2004.

     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 January 31, 2005 pursuant to Exchange Act Rule
            13a-14(a) or 15d-14(a) of the Principal Executive Officer as adopted
            pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by
            Christopher Schwartz, Chief Executive Officer.

   31.2     Certification dated January 31, 2005 pursuant to Exchange Act Rule
            13a-14(a) or 15d-14(a) of the Principal Financial Officer as adopted
            pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Shawn
            Taylor, Chief Financial Officer.

   32.1     Certification dated January 31, 2005 pursuant to 18 U.S.C. Section
            1350 as adopted pursuant to

                                       39
<PAGE>

 EXHIBIT
  NUMBER    DESCRIPTION
 -------    --------------------------------------------------------------------
            Section 906 of the Sarbanes-Oxley Act of 2002 made by Christopher
            Schwartz, Chief Executive Officer, and Shawn Taylor, Chief Financial
            Officer.

    (b)     On September 10, 2004, we filed a current Report on Form 8-K
reporting that we entered into an agreement with Gerry Anderson Productions PLC.

ITEM 14.    PRINCIPAL ACCOUNTANT FEES AND SERVICES

        The following information represents services provided by Cogen Sklar,
LLP, our present principal accountants during Fiscal 2003 and Fiscal 2004.

        AUDIT FEES

        During Fiscal 2004, 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 $39,500. 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.

        AUDIT-RELATED FEES

        During Fiscal 2004 and 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.

        TAX FEES

        During Fiscal 2004 and Fiscal 2003, our principal accountant did not
render services to us for tax compliance, tax advice and tax planning.

        ALL OTHER FEES

        During Fiscal 2003 and Fiscal 2004, 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 during Fiscal 2003 and Fiscal 2004.

                                       40
<PAGE>








                       TRIMEDIA ENTERTAINMENT GROUP, INC.

                                AND SUBSIDIARIES

                        CONSOLIDATED FINANCIAL STATEMENTS

                      OCTOBER 31, 2004 AND OCTOBER 31, 2003


<PAGE>


               TRIMEDIA ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES










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


                                                                        PAGE
                                                                        ----



INDEPENDENT AUDITORS' REPORT                                            F-1

CONSOLIDATED BALANCE SHEETS                                             F-2

CONSOLIDATED STATEMENTS OF OPERATIONS                                   F-3

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT                        F-4

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                         F-7 - F-20








<PAGE>


                          INDEPENDENT AUDITORS' REPORT



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

We have audited the consolidated balance sheets of Trimedia Entertainment Group,
Inc. and Subsidiaries as of October 31, 2004 and 2003, and the related
consolidated statements of operations, stockholders' deficit and cash flows for
the years then ended. 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 the standards of the Public Company
Accounting Oversight Board (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, 2004 and
2003, and the results of their consolidated operations and cash flows for the
years then ended, 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 2 to the
financial statements, the Company has suffered recurring losses from operations,
has negative working capital of $4,216,349 at October 31, 2004 and experienced
negative cash flow from operations of $2,468,710 and $252,411 for the years
ended October 31, 2004 and 2003, 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 2. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.




                                                          COGEN SKLAR, LLP


Bala Cynwyd, Pennsylvania
January 7, 2005





                                       F-1

<PAGE>
<TABLE>
<CAPTION>
                              TRIMEDIA ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES
                                          CONSOLIDATED BALANCE SHEETS
                                           OCTOBER 31, 2004 AND 2003



                                                                                  2004               2003
                                                                              ------------        -----------
<S>                                                                           <C>                 <C>
        ASSETS

CURRENT ASSETS
 Cash                                                                         $    185,096        $    14,085
 Prepaid expenses                                                                   29,262             22,287
                                                                              ------------        -----------
                                                                                   214,358             36,372

PROPERTY AND EQUIPMENT - Net                                                       456,135          1,318,237

CAPITALIZED FILM COSTS                                                              83,140                  -

OTHER ASSETS                                                                         9,625                200
                                                                              ------------        -----------

TOTAL ASSETS                                                                  $    763,258        $ 1,354,809
                                                                              ============        ===========

        LIABILITIES AND STOCKHOLDER'S DEFICIT

CURRENT LIABILITIES
 Term loans                                                                   $    781,613        $   741,164
 Demand note payable                                                               184,602             61,602
 Accounts payable and accrued expenses                                           3,425,599          2,509,150
 Taxes payable                                                                      17,501             17,501
 Advance from Sony                                                                  13,088            135,305
 Due to stockholder                                                                  7,137             19,234
 Deferred revenue                                                                    1,167                  -
                                                                              ------------        -----------
                                                                                 4,430,707          3,483,956

LOANS PAYABLE - STOCKHOLDER                                                      1,199,040          1,100,000
                                                                              ------------        -----------

TOTAL LIABILITIES                                                                5,629,747          4,583,956
                                                                              ------------        -----------

        STOCKHOLDERS' DEFICIT

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; 29,511,314 and 26,124,000 shares
   issued and outstanding in 2004 and 2003                                           2,950              2,612
Additional paid-in capital                                                       7,949,420          4,809,488
Accumulated deficit                                                            (12,818,959)        (8,041,347)
                                                                              ------------        -----------

TOTAL STOCKHOLDERS' DEFICIT                                                     (4,866,489)        (3,229,147)
                                                                              ------------        -----------

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                                   $    763,258        $ 1,354,809
                                                                              ============        ===========
</TABLE>


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


                                       F-2


<PAGE>
<TABLE>
<CAPTION>
                             TRIMEDIA ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES
                                    CONSOLIDATED STATEMENTS OF OPERATIONS
                                    YEARS ENDED OCTOBER 31, 2004 AND 2003



                                                                                  2004             2003
                                                                              -----------       -----------
<S>                                                                           <C>               <C>
NET REVENUE                                                                   $   239,070       $ 1,102,060


DIRECT COSTS                                                                       41,314         3,897,664
                                                                              -----------       -----------


GROSS PROFIT (LOSS)                                                               197,756        (2,795,604)


OPERATING EXPENSES                                                              4,980,068         3,817,350
                                                                              -----------       -----------


LOSS FROM OPERATIONS                                                            4,782,312         6,612,954


OTHER INCOME                                                                        4,700            26,920
                                                                              -----------       -----------


NET LOSS                                                                      $(4,777,612)      $(6,586,034)
                                                                              ===========       ===========


BASIC AND DILUTED LOSS PER SHARE                                              $     (0.17)      $     (0.25)
                                                                              ===========       ===========


WEIGHTED AVERAGE NUMBER OF SHARES                                              27,601,172        26,063,584
                                                                              ===========       ===========
</TABLE>



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

                                       F-3
<PAGE>
<TABLE>
<CAPTION>
                                         TRIMEDIA ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES
                                          CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
                                          YEARS ENDED OCTOBER 31, 2004 AND OCTOBER 31, 2003



                                                       Common                               Additional
                                                       Stock       Preferred       Common    Paid-in     Accumulated
                                                     Subscribed      Stock         Stock     Capital       Deficit         Total
                                                     ----------    ---------       ------   ----------   ------------   ------------
<S>                                                  <C>           <C>             <C>      <C>          <C>            <C>
BALANCE AT OCTOBER 31, 2002                           $ 25,000     $     100       $2,599   $4,117,901   $ (1,455,313)  $ 2,690,287

Issuance of common stock subscribed                    (25,000)            -            3       24,997              -             -

Issuance of common stock for services                        -             -           10      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                                  -           100        2,612    4,809,488     (8,041,347)   (3,229,147)

Issuance of common stock                                     -             -          296    2,501,387              -     2,501,683

Conversion of note payable                                   -             -           17      168,770              -       168,787

Issuance of warrants for consulting services                 -             -            -      192,300              -       192,300

Issuance of warrants for financing fees                      -             -            -       55,000              -        55,000

Issuance of common stock for services                        -             -           25      222,475              -       222,500

Net loss for the year ended October 31, 2004                 -             -            -            -     (4,777,612)   (4,777,612)
                                                      --------     ---------       ------   ----------   ------------   -----------

BALANCE AT OCTOBER 31, 2004                           $      -     $     100       $2,950   $7,949,420   $(12,818,959)  $(4,866,489)
                                                      ========     =========       ======   ==========   ============   ===========
</TABLE>







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

                                       F-4
<PAGE>
<TABLE>
<CAPTION>
                            TRIMEDIA ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES
                                   CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   YEARS ENDED OCTOBER 31, 2004 AND 2003

                                                                                 2004             2003
                                                                              -----------      -----------
<S>                                                                           <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES
 Net loss                                                                     $(4,777,612)     $(6,586,034)
 Adjustment to reconcile net loss to net cash
  used in operating activities
   Warrants issued for services                                                   192,300          408,600
   Warrants issued for financing fees                                              55,000           84,800
   Stock issued for expenses                                                      222,500          110,000
   Amortization of deferred loan costs                                                  -           63,200
   Amortization (capitalization) of film costs                                    (83,140)       3,694,162
   Loss on impairment                                                             673,205                -
   Depreciation and amortization                                                  188,897          188,898
   (Increase) decrease in assets
     Accounts receivable                                                                -           13,500
     Prepaid expenses                                                              (6,975)         (22,287)
     Film costs                                                                         -          (37,125)
     Other assets                                                                  (9,425)               -
   Increase (decrease) in liabilities
     Accounts payable and accrued expenses                                      1,197,590        1,678,570
     Taxes payable                                                                      -           16,000
     Advances from Sony                                                          (122,217)         135,305
     Deferred revenue                                                               1,167                -
                                                                              -----------      -----------

 Net cash used in operating activities                                         (2,468,710)        (252,411)
                                                                              -----------      -----------

CASH FLOWS FROM INVESTING ACTIVITIES
 Due to stockholder                                                                86,943           19,234
                                                                              -----------      -----------

CASH FLOWS FROM FINANCING ACTIVITIES
 Net proceeds from sale of common stock                                         2,501,683                -
 Net borrowings (payments) on term loans                                          (71,905)         157,891
 Net proceeds (repayments) from demand note payable                               123,000           61,602
                                                                              -----------      -----------

Net cash provided by financing activities                                       2,552,778          219,493
                                                                              -----------      -----------

NET INCREASE (DECREASE) IN CASH                                                   171,011          (13,684)

CASH - BEGINNING OF YEAR                                                           14,085           27,769
                                                                              -----------      -----------

CASH - END OF YEAR                                                            $   185,096      $    14,085
                                                                              ===========      ===========
</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)
                         YEARS ENDED OCTOBER 31, 2004 AND 2003

<TABLE>
<CAPTION>
                                                                 2004          2003
                                                               --------      --------
<S>                                                            <C>           <C>
SUPPLEMENTAL DISCLOSURES OF CASH
FLOW INFORMATION

CASH PAID DURING THE YEAR FOR:
Interest                                                       $ 86,933      $ 81,130
                                                               ========      ========

SUPPLEMENTAL DISCLOSURES OF NON-CASH
INVESTING AND FINANCING ACTIVITIES


Conversion of term loan to common stock                        $168,787      $      -
                                                               ========      ========

Accrued interest converted to term loan                        $281,141      $      -
                                                               ========      ========
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, 2004 AND 2003




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"); Ruffnation Films,
LLC, Snipes Productions, LLC Ruffnation Music, Inc. ("Ruffnation Music"); Four
Point Play Productions, LLC ("Four Point Play"); TM Film Distribution, Inc.;
Trimedia Film Group, Inc. and TME Entertainment Film- und Musik- Producktions
and -Verwertungs- Gesellschaft m.b.H. ("TME") (collectively, 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 Trimedia and its
wholly-owned subsidiaries. All material intercompany transactions have been
eliminated in consolidation.

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.

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 associated with the
film "Snipes" were fully amortized during 2003, resulting in $3,694,162 of
amortization expense. The capitalized film costs of $83,140 as of October 31,
2004 are costs associated with five films that are in development and
preproduction.




                                       F-7
<PAGE>


               TRIMEDIA ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            OCTOBER 31, 2004 AND 2003



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.

Loss Per Share
--------------
The Company follows SFAS 128, "Earnings Per Share" resulting in the presentation
of basic and diluted earnings (loss) per share. Because the Company reported a
net loss for the years ended October 31, 2004 and 2003, common stock equivalents
consisting of Convertible Preferred Stock, options and warrants were
anti-dilutive; therefore, the amounts reported for basic and dilutive loss per
share were the same.

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, 2004 AND 2003




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

Recoverability of Long Lived Assets
-----------------------------------
The Company follows SFAS No. 144, "Accounting for the Impairment or Disposal of
Long-Lived Assets" ("Statement 144"). Long-lived assets to be held and used are
reviewed for impairment whenever events or changes in circumstances indicate
that the related carrying amount may not be recoverable. When required,
impairment losses on assets to be held and used are recognized based on the
excess of the asset's carrying amount. Fair value of the asset and long-lived
assets to be disposed of are reported at the lower of carrying amount or fair
value less cost to sell. The Company recorded a loss on impairment of $673,205
during the year ended October 31, 2004 (Note 3).

Recently Issued Accounting Pronouncements
-----------------------------------------
In December 2004, the FASB revised SFAS 123, "Accounting for Stock-Based
Compensation" to require all companies to expense the fair value of employee
stock options. SFAS 123R is effective for the first period ending after December
15, 2005 for a small business issuer.

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

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 used on reported results.

In January 2003, subsequently revised December 2003, the FASB issued FASB
Interpretation No. 46R ("FIN 46R"), Consolidation of Variable Interest Entities
- An Interpretation of AARB N. 51. FIN 46R 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 46R
provisions are effective for all arrangements entered into after January 31,
2003. FIN 46R provisions are required to be adopted for the first period ending
after December 15, 2004 for a small business issuer.

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

In May 2003, FASB issued Statement of Financial Accounting Standards No. 150,
Accounting for Certain Financial Instruments with Characteristics of both
Liabilities and Equity ("SFAS No. 150"). SFAS No. 150 establishes standards for
how an issuer classifies and measures certain financial instruments with
characteristics of both debt and equity and requires an issuer to classify the
following instruments as liabilities in its balance sheet:

1.       a financial instrument issued in the form of shares that is mandatorily
         redeemable and embodies an unconditional obligation that requires the
         issuer to redeem it by transferring its assets at a specified or
         determinable date or upon an event that is certain to occur;
2.       a financial instrument, other than an outstanding share, that embodies
         an obligation to repurchase the issuer's equity shares, or is indexed
         to such an obligation, and requires the issuer to settle the obligation
         by transferring assets; and





                                       F-9
<PAGE>


               TRIMEDIA ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            OCTOBER 31, 2004 AND 2003




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

Recently Issued Accounting Pronouncements (Continued)
-----------------------------------------------------

3.       financial instrument that embodies and unconditional obligation that
         the issuer must settle by issuing a variable number of its equity
         shares if the monetary value of the obligation is based solely or
         predominantly on (1) a fixed monetary amount, (2) variations in
         something other than the fair value of the issuer's equity shares, or
         (3) variations inversely related to changes in the fair value of the
         issuer's equity shares.

In November 2003, FASB issued FASB Staff Position No. 150-3 ("FAS 150-3") which
deferred the effective dates for applying certain provisions of SFAS No. 150
related to mandatorily redeemable financial instruments of certain non-public
entities and certain mandatorily redeemable non-controlling interests for public
and non-public companies. For public entities SFAS No. 150 is effective for
mandatorily redeemable financial instruments entered into or modified after May
31, 2003 and is effective for all other financial instruments as of the first
interim period beginning after June 15, 2003. For mandatorily redeemable
non-controlling interest that would not have to be classified as liabilities by
a subsidiary under the exception in paragraph 9 of SFAS No. 150, but would be
classified as liabilities by the parent, the classification and measurement
provisions of SFAS No. 150 are deferred indefinitely. The measurement provisions
of SFAS No. 150 are also deferred indefinitely for other mandatorily redeemable
non-controlling interests that were issued before November 4, 2003. For those
instruments, the measurement guidance for redeemable shares and non-controlling
interests in other literature shall apply during the deferral period.

On December 17, 2003, the Staff of the SEC issued Staff Accounting bulletin No.
104 (SAB No. 104), Revenue Recognition, which supersedes SAB No. 101, "Revenue
Recognition in Financial Statements." SAB No. 104's primary purpose is to
rescind accounting guidance contained in SAB No. 101 related to multiple element
revenue arrangements, superseded as a result of the issuance of EITF 00-21,
"Accounting for Revenue Arrangements with Multiple Deliverables." Additionally,
SAB No. 104 rescinds the SEC's Revenue Recognition in Financial Statements
Frequently Asked Questions and Answers (the FAQ) issued with SAB No. 101 that
had been codified in SEC Top 13, Revenue Recognition. Selected portions of the
FAQ have been incorporated into SAB No. 104. While the wording of SAB No. 104
has changed to reflect the issuance of EITF 00-21, the revenue recognition
principles of SAB No. 101 remain largely unchanged by the issuance of SAB No.
104.

NOTE 2 - MANAGEMENT PLANS

Since its inception, the Company has incurred significant losses and, as of
October 31, 2004, had accumulated losses of $12,818,959. For the years ended
October 31, 2004 and 2003 the Company's net losses were $4,777,612 and
$6,586,034. In addition, the Company had negative working capital of $4,216,349
at October 31, 2004 and experienced negative cash flow from operations of
$2,468,710 and $252,411 for the years ended October 31, 2004 and 2003. 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.


                                      F-10
<PAGE>


               TRIMEDIA ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            OCTOBER 31, 2004 AND 2003


NOTE 2 - MANAGEMENT PLANS (Continued)

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 $2,165,255 as of October 31, 2004. The Company has granted
security interests in substantially all of its assets to secure its obligations
to repay approximately $876,000 of this indebtedness. During Fiscal 2005, the
Company anticipates continuing to pursue all possible funding scenarios that
will finance its business operations. The Company intends to obtain financing to
fund its operations for the next twelve months through sales of its 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. The
Company is presently engaged in discussions with a United Kingdom broker
regarding a potential listing on the Alternative Investment Market ("AIM") in
London. However, the Company is not certain that these financing transactions
will close or whether the Company will be able to obtain additional financing.
The Company believes that it will be necessary for the Company to raise at least
$10,000,000 in order to meet the anticipated cash requirements through January
31, 2006. There can be no assurance that the Company will be successful in its
efforts to raise this amount of additional financing. In the event that the
Company is unable to raise these funds, the Company will then be required to
delay its plans to grow its business and the Company will rely on its net
revenues to fund its operations.

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 2005 to meet expected negative operating cash flows.


NOTE 3 - PROPERTY AND EQUIPMENT

Property, equipment and estimated useful lives consist of the following:
<TABLE>
<CAPTION>
                                                             YEARS           2004           2003
                                                           ----------     ----------     ----------
            <S>                                            <C>            <C>            <C>
            Studio equipment                                 5 - 7        $1,162,053     $1,162,053
            Office furniture                                   7              12,270         12,270
            Studio improvements                                                    -        756,700
                                                                          ----------     ----------
                                                                           1,174,323      1,931,023
            Less:  Accumulated depreciation                                  718,188        612,786
                                                                          ----------     ----------

                                                                          $  456,135     $1,318,237
                                                                          ==========     ==========
</TABLE>

Related depreciation and amortization expenses were $188,897 and $188,898 for
the years ended October 31, 2004 and 2003.






                                      F-11
<PAGE>


               TRIMEDIA ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            OCTOBER 31, 2004 AND 2003



NOTE 3 - PROPERTY AND EQUIPMENT (CONTINUED)

On August 31, 2004, the Company's office and studio space leases expired. On
November 22, 2004, the Company entered into an agreement to assign its rights
and obligations of the studio lease to a third party ("Successor"). As part of
the agreement, the Company is entitled to utilize one-third of the monthly
studio time during the term of the three year agreement, with the Successor
having access for the remaining time. The Successor pays the monthly rent
directly to the landlord. The Company receives no monetary compensation from the
Successor.

Based on the fact that the Company assigned its studio lease obligation to a
third-party and that the majority, if not all, of the studio improvements cannot
be removed, that it will not be feasible to remove the studio improvements upon
the expiration of the Successor's three year lease, and that it is highly
unlikely that the carrying amount is recoverable from future undiscounted cash
flow, the Company recorded a loss on impairment of the total net carrying amount
of the studio improvements of $673,205. The loss on impairment is included in
operating expenses for the year ended October 31, 2004. However, management
believes that the carrying amount of the studio equipment does not exceed its
fair value.

NOTE 4 - 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. The bank has filed a
Complaint for Confession on Judgment for the outstanding principal balance plus
interest and attorney fees of approximately $5,800, which is included in accrued
expenses. At October 31, 2004 and 2003, the total outstanding balance of the
term loan was $126,708 and $137,376.

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 accrued interest at 14% per annum, payable in monthly installments
commencing November 30, 2002. The note matured on November 30, 2003 and was
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 $168,787. In January 2004, Trident converted the note into
168,787 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.





                                      F-12
<PAGE>


               TRIMEDIA ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            OCTOBER 31, 2004 AND 2003


NOTE 4 - TERM LOANS (Continued)

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. On June 2, 2004, pursuant to a letter agreement, the parties
amended the promissory note to extend the maturity date through October 31,
2005, convert the accrued interest payable of $281,141 into the outstanding
principal balance and reduce the interest rate to 20% per annum. The outstanding
balance of this loan as of October 31, 2004 and 2003 was $654,905 and $435,000.


NOTE 5 - 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, Trimedia repaid $35,000 toward a 12% demand note payable.

During the third quarter of Fiscal 2004, Trimedia borrowed $90,000 from a third
party lender, with principal and interest, at 10% per annum, due on demand.

In September 2004, Trimedia repaid $25,000 toward a 10% demand note payable.

In October 2004, Trimedia borrowed $58,000 from a third party lender, with
principal and interest, at 10% per annum, due on demand.






                                      F-13
<PAGE>


               TRIMEDIA ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            OCTOBER 31, 2004 AND 2003




NOTE 6 - DUE TO STOCKHOLDER

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

NOTE 7 - LOAN PAYABLE - STOCKHOLDER

Loans payable - stockholder consist of two unsecured demand notes payable to
Christopher Schwartz in the amounts of $1,100,000, accruing interest at 7% per
annum, and $99,040, accruing interest at 12% per annum. Interest expense,
associated with these notes for the years ended October 31, 2004 and 2003 was
$80,449 and $57,750. In addition, $-0- and $19,250 of interest was capitalized
as part of films costs for the years ended October 31, 2004 and 2003.
Christopher Schwartz does not intend to call these notes during the next fiscal
year and therefore the notes are reflected on the balance sheet as a non-current
liability.

NOTE 8 - 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.

During the year ended October 31, 2004 the Company sold an aggregate of
2,952,209 shares of its common stock in a series of private offerings and
received net proceeds of $2,501,683.

In addition, the holder of a $168,787 convertible note submitted the note for
conversion at $1 per share into 168,787 shares of the Company's common stock.

In March 2004, a holder of a warrant to purchase 62,500 shares of the Company's
common stock exchanged this warrant in a cashless transaction for 16,318 shares
of the Company's common stock. The warrant was originally issued on November 1,
2002. Upon issuance, the Company recognized expense of $63,200 based on the fair
value method as described in accounting requirements of Statement of Financial
Accounting Standards ("SFAS") No. 123. Since the valuation of the exchange of
the warrant for 16,318 shares of common stock did not exceed the previously
recognized expense of $63,200, no additional cost was recorded.

In August 2004, the Company issued 250,000 shares of its common stock in
exchange for consulting services valued at $222,500.







                                      F-14
<PAGE>


               TRIMEDIA ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            OCTOBER 31, 2004 AND 2003


NOTE 8 - STOCKHOLDERS' EQUITY (Continued)

Options
-------
Pursuant to the terms of his Employment Agreement (Note 11), 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 vested on October 9, 2004 at an exercise price of $0.75
         per share;
     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 be eligible 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.

In March 2004, the Company entered into an employment agreement with the new
President of Trimedia Entertainment Group, Inc. and Chief Executive Officer of
European Operations. The agreement is for the period April 12, 2004 through
April 12, 2006. Pursuant to his employment agreement, this employee is entitled
to annual compensation of $540,000 plus health insurance and vacation time.

In addition, pursuant to the contract, the employee received options to purchase
shares of the Company's common stock, as follows:

     o   2,000,000 shares upon signing the agreement, which vested immediately.
     o   2,000,000 shares vest upon completing an initial public offering of the
         Company's common stock in the United Kingdom provided Mr. Taylor is
         employed by the Company on the vesting date pursuant to the terms of
         the employment agreement.
     o   2,000,000 shares vest upon completion of ten films provided Mr. Taylor
         is employed by the Company on the vesting date pursuant to the terms of
         the employment agreement.

The option may be exercised for ten years from the date the options vest. None
of the options have been exercised as of October 31, 2004.

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 years ended October 31, 2004 and 2003. 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 4.15% for 2004 and 5.27% for 2003.




                                      F-15
<PAGE>


               TRIMEDIA ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            OCTOBER 31, 2004 AND 2003




NOTE 8 - STOCKHOLDERS' EQUITY (Continued)

                                                           2004       2003
                                                        ----------  ----------

          Net loss                    As reported       $4,687,612  $6,586,034
                                      Pro forma         $5,255,612  $7,345,034

          Net loss per share          As reported       $     0.17  $     0.25
                                      Pro forma         $     0.19  $     0.28


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.

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.

In March 2004, the Company issued Stock Purchase Warrants to purchase 124,375
shares of its common stock at an exercise price of $1.00 per share pursuant to
Section 4(2) of the Securities Act in exchange for consulting services. The
Warrants are exercisable until March 2007. In accordance with the fair value
method as described in accounting requirements of SFAF No. 123, the Company
recognized consulting expense of $164,300.

In June 2004, the Company issued Stock Purchase Warrants to purchase 50,000
shares of its common stock at an exercise price of $1.06 per share pursuant to
Section 4(2) of the Securities Act in exchange for consulting services. The
Warrants are exercisable until June 2007. In accordance with the fair value
method as described in accounting requirements of SFAF No. 123, the Company
recognized consulting expense of $28,000.





                                      F-16
<PAGE>


               TRIMEDIA ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            OCTOBER 31, 2004 AND 2003




NOTE 8 - STOCKHOLDERS' EQUITY (Continued)

Warrants (Continued)
--------------------
In June 2004, the Company issued Stock Purchase Warrants to purchase 62,500
shares of its common stock at an exercise price of $0.80 per share pursuant to
Section 4(2) of the Securities Act in exchange for a financing fee. The Warrants
are exercisable until June 2007. In accordance with the fair value method as
described in accounting requirements of SFAF No. 123, the Company recognized
financing fee expense of $32,000.

In August 2004, the Company issued Stock Purchase Warrants to purchase 62,500
shares of its common stock at an exercise price of $0.80 per share pursuant to
Section 4(2) of the Securities Act in exchange for a financing fee. The Warrants
are exercisable until August 2007. In accordance with the fair value method as
described in accounting requirements of SFAF No. 123, the Company recognized
financing fee expense of $23,000.

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

WARRANTS GRANTED                                     299,375    $0.80 TO $1.06                  0.88

WARRANTS EXERCISED                                   (62,500)            $1.50                 $1.50
                                                ------------    --------------        --------------

WARRANTS OUTSTANDING
AT OCTOBER 31, 2004                                  994,375    $0.80 TO $1.50                 $1.20
                                                ============    ==============        ==============
</TABLE>

The warrants that are exercisable at October 31, 2004 are summarized as follows:
<TABLE>
<CAPTION>
                                          Weighted
                                          Average            Number of Warrants
                                         Remaining               Currently              Weighted Average
             Warrant Price           Contractual Life            Exercisable             Exercise Price
         -----------------------    -------------------    -----------------------    --------------------
         <S>                        <C>                    <C>                        <C>
             $0.80 TO $1.50              2.69 YEARS                 994,375                  $1.20
</TABLE>



                                      F-17
<PAGE>


               TRIMEDIA ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            OCTOBER 31, 2004 AND 2003



NOTE 9 - 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. The reconciliation of the statutory federal rate to the
Company's historical income tax expense (benefit) is as follows:
<TABLE>
<CAPTION>
                                                             Year Ended                Year Ended
                                                          October 31, 2004          October 31, 2003
                                                         -----------------          ----------------
              <S>                                        <C>                        <C>
              Income tax benefit at
                U.S. federal income tax rate             $      (1,624,000)         $     (2,239,000)
              Tax benefit not recognized                         1,624,000                 2,239,000
                                                         -----------------          ----------------

              Income tax benefit                         $               -          $              -
                                                         =================          ================

              Income tax benefit consists
                of the following:
              Current tax benefit
                Federal                                  $               -          $              -
                State                                                    -                         -
                                                         -----------------          ----------------

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

              Deferred tax benefit
                Federal                                  $       3,863,000          $      2,266,000
                State                                                    -                         -
                Valuation allowance                             (3,863,000)               (2,266,000)
                                                         -----------------          ----------------
                                                                         -                         -
                                                         -----------------          ----------------

                                                         $               -          $              -
                                                         =================          ================
</TABLE>

The components of the deferred assets (liabilities) are as follows:
<TABLE>
<CAPTION>
                                                            2004                       2003
                                                         -----------                -----------
                             <S>                         <C>                        <C>
                             Net operating loss          $ 3,863,000                $ 2,266,000
                             Valuation allowance          (3,863,000)                (2,266,000)
                                                         -----------                -----------

                                                         $         -                $         -
                                                         ===========                ===========
</TABLE>
The valuation allowance for deferred tax assets as of October 31, 2004 and 2003
was $3,863,000 and $2,266,000. The change in the total valuation allowance for
the years ended October 31, 2004 and 2003 was an increase of $1,597,000 and an
increase of $2,238,500. In assessing the realizability of deferred tax assets,
management considers whether it is more likely than not that some portion or all
of the deferred tax assets will not be realized. The ultimate realization of
deferred tax assets is dependent upon the generation of future taxable income
during the periods in which the net operating losses and temporary differences
become deductible. Management considered projected future taxable income and tax
planning strategies in making this assessment. At October 31 2004, the Company
had net operating loss carry forwards for Federal and State income tax purposes
of approximately $11,362,000 (the "NOL carry forwards"), which were available to
offset future taxable income, if any, through 2024. Based upon the limited
operating history of the Company and losses incurred to date, management has
fully reserved the deferred tax asset.







                                      F-19
<PAGE>

               TRIMEDIA ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            OCTOBER 31, 2004 AND 2003




NOTE 10 - LEASE COMMITMENTS

The Company leases its office space for $9,625 per month, under a lease
agreement. The lease expires on December 31, 2008 and contains an option for an
additional two years. Rent expense for the years ended October 31, 2004 and 2003
amounted to approximately $149,000 and $180,000.


NOTE 11 - 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 8.

In March 2004, the Company entered into an employment agreement with the new
President of Trimedia Entertainment Group, Inc. and Chief Executive Officer of
European Operations. The agreement is for the period April 12, 2004 through
April 12, 2006 and provides annual compensation of $540,000 plus health
insurance and vacation time. In addition, this employee received option grants
described in Note 8.

The Company also may enter into employment agreements with certain other key
employees.


NOTE 12- 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, 2004                    Studio        Production        Total
            ----------------------------------       ----------       ----------     ----------
            <S>                                      <C>              <C>            <C>
            Net sales                                $   21,020       $  218,050     $  239,070
            Loss from operations                        866,785        3,915,527      4,782,312
            Total assets                                451,093          312,165        763,258
            Depreciation and amortization               182,405            6,492        188,897
            Capital expenditures                     $        -       $        -     $        -
</TABLE>
<TABLE>
<CAPTION>
                   For The Year Ended
                    October 31, 2003
            ----------------------------------
            <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                     $        -       $        -     $        -
</TABLE>






                                      F-20
<PAGE>

               TRIMEDIA ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            OCTOBER 31, 2004 AND 2003



NOTE 13 - 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, as amended, 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.
The Company anticipates releasing at least one additional film through Charles
Street in fiscal 2005.

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 14 - SUBSEQUENT EVENTS

On November 17, 2004, the Company borrowed $150,000 from a third party lender,
with principal and interest, at 10% per annum, due on demand.

On December 20, 2004, TM Film Distribution, Inc., a wholly-owned subsidiary,
entered into a loan agreement with a foreign bank, Fairbairn Private Bank
Limited, under which the bank provides a line of credit facility for a maximum
of 1,628,055 pounds. Interest is payable quarterly at the London Interbank
Offered Rate ("LIBOR") plus 0.375%. The line is secured by funds held on deposit
with the lender. The outstanding principal balance of the line is due in full
twenty-four months after the final draw down of the line. In December, 2004 and
January 2005, TM Film Distribution, Inc. was advanced an aggregate of 1,500,000
pounds (U.S. $2,850,000) under this line of credit. A portion of these funds
were used to satisfy expenses related to this transaction.

On December 21, 2004 the Company entered into a consulting agreement with a
financial advisor. As compensation for performing the services in accordance
with the agreement, the consultant will receive options to purchase shares of
the Company's common stock, as follows:

      o   1,000,000 shares upon the date of the agreement, vested immediately at
          an exercise price of $0.49 per share.
      o   1,000,000 shares vest upon completing an equity offering of
          $10,000,000 provided that the consultant is still performing all
          duties required pursuant to the consulting agreement.
      o   1,000,000 shares vest upon the first anniversary of the date of the
          agreement provided that the consultant is still performing all duties
          required pursuant to the consulting agreement.














                                      F-21







<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: January 31, 2005
                                         TriMedia Entertainment Group, Inc.


                                         By: /s/ Christopher Schwartz
                                             --------------------------------
                                             Christopher Schwartz
                                             Chief Executive Officer

                                         By: /s/ Shawn Taylor
                                             --------------------------------
                                             Shawn Taylor
                                             Chief Financial Officer
                                             (principal financial officer and
                                             principal accounting officer)