SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

[X]  ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE ACT OF
     1934

                         For the fiscal year ended 2002

[ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE ACT
     OF 1943

     For the transition period from ___________________ to ___________________

                         COMMISSION FILE NUMBER: 0-28219

                        ECLIPSE ENTERTAINMENT GROUP, INC.
                 (Name of small business issuer in its charter)

                     Nevada                                       91-1766849
         (State or other jurisdiction of                        (I.R.S Employer
         incorporation or organization)                      Identification No.)

10520 Venice Boulevard, Culver City, California                      90232
    (Address of principal executive offices)                      (Zip Code)

                    Issuer's telephone number: (760) 674-5750

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

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

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B not contained in this form, and no disclosure  will be contained,
to the best of  registrant's  knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part III of this Form  10-KSB or any
amendment to this Form 10-KSB.

State issuer's revenues for its most recent fiscal year: $1,500.00

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates  computed by reference to the price at which the common equity
was sold,  or the average bid and asked  price of such  common  equity,  as of a
specified  date within the past 60 days: As of April 13th,  2003,  the aggregate
market value of shares held by non-affiliates  (based on the close price on that
date $.08) was $1,468,345.

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the last practicable date: 18,354,321 as of April 13th, 2003.

This form 10KSB contains  forward-looking  statements  within the meaning of the
federal securities laws. These forward-looking  statements are necessarily based
on certain  assumptions and are subject to significant risks and  uncertainties.
These  forward-looking  statements are based on management's  expectations as of
the date hereof, and the Company does not undertake any responsibility to update
any of these  statements in the future.  Actual future  performance  and results
could  differ  from that  contained  in or  suggested  by these  forward-looking
statements as a result of factors set forth in this Form 10KSB  (including those
sections hereof incorporated by reference from other filings with the Securities
and Exchange  Commission),  in particular as set forth in "Business Risks" under
Item 1 and set forth in the "Management's Discussion and Analysis" under Item 6.
<PAGE>
ITEM 1. DESCRIPTION OF BUSINESS

BUSINESS DEVELOPMENT.

Eclipse  Entertainment  Group, Inc.  ("Company") was incorporated on January 27,
1997 in the State of Nevada to  produce  film  entertainment  that is  developed
under carefully managed budgets.  The Company has been attempting to establish a
network of foreign and domestic buyers to acquire its  programming.  The Company
currently has no employees,  other than the officers and directors. The officers
and directors handle the business activities of the Company.

BUSINESS OF THE COMPANY.

The Company has been focused on the production,  acquisition and distribution of
action-oriented  feature films that have been developed  and/or  produced within
low to medium budgets. To date the Company has produced one action feature film,
Ancient Warriors, and has acquired the rights to other similar films, which were
available for distribution.

Eclipse's  feature film  production  strategy was to develop and produce feature
films  when the  production  budgets  for the  films are  substantially  covered
through a combination of pre-sales, output arrangements, equity arrangements and
production  loans with "gap"  financing.  It was  believed  that this plan would
significantly   reduce  the  Company's  capital   requirements.   However,   the
independent  film  market has been very slow over the past years and the Company
has been  unable to  consummate  any such  transactions,  forcing the Company to
directly finance all film production and distribution costs.

In most cases,  producers  of lower  budget  films will assign the  distribution
rights to the Company with no monetary advance.  In return for the assignment of
the  distribution  rights,  the  Company  undertakes  to  advance  some  initial
marketing  costs  associated  with the film.  These  costs  include  film market
attendance,   poster/flyer  artwork,  printing,  limited  advertising  in  trade
magazines during film markets,  phone, fax and courier costs.  These costs range
from $2,500 to $25,000 per film. In some cases a small advance (in the form of a
minimum  guarantee  against  future sales) is justified if the film has big name
talent attached that will increase the  marketability.  These advances can be as
low as $2,000 and will not exceed $50,000 per film.

The  Company  previously  acquired  the  rights to the  following  films in this
manner: Beretta's Island (1992),  Doublecross (1997) and The Process (1997). For
these acquired films,  the Company was entitled to take a sales commission (plus
reimbursement of marketing expenses) from all sales of the film in the Territory
covered in the Distribution  Agreement.  This sales commission  generally ranged
from 15%-50% of gross  revenues.  The  percentage  was  negotiated  based on the
marketability  of the film.  The  Territory  was  separated  into Domestic (US &
Canada)  and  Foreign  (all  other  countries)  respectively  but was  generally
worldwide  (Domestic and Foreign).  To date the revenue generated from the sales
of these films has not exceeded the costs of the Company's  former  distribution
company, Weststar Entertainment, Inc. During the year the Company began handling
the distribution of its films through Eclipse Entertainment Inc. (a wholly owned
subsidiary). The Company received $1,500 in revenue from sales of these acquired
films during the year.

In an effort to reduce  costs,  on January  1, 2002 the  Company  cancelled  its
distribution agreement with Westar Entertainment,  Inc. ("Westar") dated January
1, 1998  pursuant  to which  this firm  marketed  the  Company's  products  both
domestically  and  worldwide  thus,   releasing  the  Company's   obligation  to
distribute its films exclusively  through this company,  allowing the Company to
utilize its subsidiary  Eclipse Releasing for the same purpose.  During the year
Eclipse  Releasing  pursued  strategic  partnerships or output deals with one or
more of the US Studios and began  discussions with various film funds to attempt
to  secure  funding  for  future  film  projects.  This  strategy  has not  been
successful  to date.  It is the  intention  of  management  not to  expand  film
production  operations.  However management will continue attempting to sell the
film,  Ancient Warriors  through Eclipse  Releasing until such time that revenue
can be generated.

                                       2
<PAGE>
During the year, due to the age of the films which the Company had acquired, and
the fact the Company does not anticipate  any future  revenues from these films,
the  Company   cancelled   the   worldwide   distribution   agreement   for  the
action/adventure  films  Beretta's  Island and Double  Cross dated  September 2,
1997, with Franco Columbu,  an Officer and Director of the Company. In addition,
the Company has cancelled the distribution agreement dated January 30, 1997 with
Pinoy  Productions,  Inc.  covering  the martial  arts film The Process  (Arthur
Birzneck,  an officer and  director of the  Company,  is also  President of that
company).  The company  has written off the value of the films on its  financial
statements.

Previously  the Company  had  completed  production  and made ready for sale the
film, Ancient Warriors.  Pursuant to a contract between Franco Columbu,  Ancient
Warriors LLC, and Eclipse  Entertainment,  the first monies  generated  from the
film were to be used to recoup  costs as  follows;  Ancient  Warriors  LLC is to
receive  10% of the monies for  administration  fees,  royalties  and  remaining
salaries.  20% of the monies are to go to the  distributor of the film,  Eclipse
Releasing. The remaining 70% of the monies are to be distributed to investors in
the film,  proportionally  until repaid in full.  While Ancient Warriors LLC has
made limited  sales of the film,  the revenue  received  ($22,000) has been less
than their  direct  expenses of marketing  the film and the Company  received no
revenue.

This  agreement  has been  modified by the  agreement  dated Dec 30th,  2002 see
exhibit 10.3 whereby all the Company's  rights to the film were  transferred  to
Eclipse Releasing and the Company's  noteholders agreed to forgive the Company's
obligations to them under their notes ($3,709,575) and received Preferred shares
in Eclipse  Releasing.  The terms of the Preferred  shares in Eclipse  Releasing
provide that the Preferred  shareholders  receive all proceeds from sales of the
film,  less direct  selling  expenses,  until their  Preferred  shares are fully
redeemed.  The Preferred shares of Eclipse  releasing have no claims against the
parent  company.  To date no funds have been paid to the Preferred  shareholders
pursuant to this  transaction.  In a separate  decision  the Company has decided
that since it has received no revenue  from the its acquired  films or the film,
Ancient  Warriors  to date  and due to the age of the film  does not  anticipate
significant  future  revenue  from the film to treat the film assets as impaired
and has written off their costs ($3,425,735) on the financial statements.

At present the Company  utilizes the  services of its Officers and  Directors to
conduct  business.  Mr.  Birzneck,  the  President/CFO  oversees all operational
activities of the Company and Eclipse  Releasing Inc. on a full time basis.  Dr.
Columbu,  the CEO  consults  with the  Company on  Production  and  Distribution
activities  on a  part-time  basis  as he  maintains  a  full-time  Chiropractic
practice in Los Angeles, CA. Mr. Nelson, the Secretary consults with the Company
on administrative matters on a part-time basis.

Over the  last  several  months,  management  has  explored  various  strategies
including, but not limited to, potential divestitures, joint marketing ventures,
a merger, acquiring new assets, a re-capitalization or other actions. Management
is unsure that any such plans and actions can be effectively implemented.

Management  of the Company  responded to the lack of sales  revenue with several
cash conserving actions. These steps included the termination of all non officer
personnel,  renewed  negotiations  with several  suppliers  for reduced costs on
goods and services, restructuring debt and increased targeted marketing efforts.
The Company has also made an effort to sell their film assets at reduced  prices
to generate cash for the payment of liabilities.  Management  believes that cash
flow from  operations will not be sufficient to allow the Company to continue in
business on the same basis in 2003.

As a result of the above  factors,  management  entered into an  agreement  with
TerraStar  Marketing  Inc.  ("TerraStar"),  whereby the Company would acquire an
exclusive license from TerraStar for its proprietary PC alternative, proprietary
applications  and web based  service  infrastructure  in exchange for  3,000,000
Class  A  Preferred  shares  with 6 to 1  voting  rights  and  convertible  into
18,000,000 common shares. Prior to completion of the transaction the Company and
TerraStar  have agreed to alter the  agreement to focus on the medical  vertical
markets license with a specific  emphasis on the  prescription  sub-segment.  To
this end the Company, TerraStar and Nations Rx, Inc. ("NationsRx",  a California
Company) and client of TerraStar,  have agreed to revise the previous  agreement
to include the  acquisition  of an exclusive  license for all the  enterprise of
NationsRx,  Inc. NationsRx is a prescription  benefit management company that is
planning on  utilizing  the  TerraStar  hardware  and  software as part of their
product  delivery model. It is currently  anticipated  that this transaction may
require  additional  shareholder  approval and  amendment of the  documentation,
which has already been filed.

                                       3
<PAGE>
The Company currently  believes that the 3,000,000 Class A Preferred shares will
be  sufficient  to acquire both  licenses  and will not require that  additional
consideration  be  approved.  However,  the  issuance of the  3,000,000  Class A
Preferred  shares may result in a change of control.  The Company will be filing
the revised documentation upon conclusion of the discussions between the parties
and currently anticipates this occurring in the next seven days.

ADDITIONAL INFORMATION

We are subject to the informational  requirements of the Securities Exchange Act
of 1934 (the "Exchange  Act") and, in accordance  therewith,  will file reports,
proxy statements and other information with the Commission.  Such reports, proxy
statements and other information may be inspected at public reference facilities
of the Commission at Judiciary  Plaza,  450 Fifth Street N.W.,  Washington  D.C.
20549;  Northwest Atrium Center, 500 West Madison Street,  Suite 1400,  Chicago,
Illinois  60661;  7 World Trade  Center,  New York,  New York,  10048;  and 5670
Wilshire Boulevard,  Los Angeles,  California 90036. Copies of such material can
be obtained  from the Public  Reference  Section of the  Commission at Judiciary
Plaza, 450 Fifth Street N.W.,  Washington,  D.C. 20549 at prescribed  rates. For
further  information,  the SEC maintains a website that contains reports,  proxy
and information statements,  and other information regarding reporting companies
at (http://www.sec.gov).

BUSINESS RISKS

ONLY LIMITED PRIOR OPERATIONS.

The Company has only limited operations.  The Company's principal  activities to
date have been limited to production of one film,  distribution  agreements  for
three  others  and  prospect  development,  it  has  a  limited  record  of  any
revenue-producing  operations. At this time there is no basis for the assumption
that the Company will be able to achieve its business  plans.  In addition,  the
Company has only limited assets. As a result, there can be no assurance that the
Company will generate  significant  revenues in the future;  and there can be no
assurance  that the Company will operate at a profitable  level.  If the Company
continues to be unable to obtain customers and generate  sufficient  revenues so
that it can profitably operate, the Company's business will not succeed.

NEED FOR ADDITIONAL FINANCING MAY AFFECT OPERATIONS.

Current  funds  available  to the  Company  will  not be  adequate  for it to be
competitive in the areas in which it intends to operate.  Therefore, the Company
will need to raise  additional  funds in order to fully  implement  its business
plan.  The Company will attempt to raise  approximately  $500,000 in  additional
funds over the next 12 months through private placements.  However, there can be
no assurance  that the Company  will be  successful  in raising such  additional
funds. Regardless of whether the Company's cash assets prove to be inadequate to
meet the  Company's  operational  needs,  the Company  might seek to  compensate
providers of services by issuance of stock in lieu of cash.

The Company's  continued  operations  therefore  will depend upon its ability to
raise additional funds through bank borrowings,  equity or debt financing. There
is no assurance that the Company will be able to obtain additional  funding when
needed, or that such funding, if available,  can be obtained on terms acceptable
to the Company.  If the Company cannot obtain needed funds,  it may be forced to
curtail or cease its activities.

If additional  shares are issued to obtain financing,  current  shareholders may
suffer a dilutive effect on their percentage of stock ownership in the Company.

A large portion of the Company's financing to date has been through the issuance
of shares or through equity financing with share based collateral.  There can be
no  assurances  that the Company  will become self  sufficient.  Therefore,  the
Company may  continue  to issue  shares to further the  business,  and  existing
shareholders  may suffer a dilutive  effect on the price of their shares as well
as a loss of voting power in the Company.

                                       4
<PAGE>
RISKS IN CONNECTION WITH DISTRIBUTION OF FILMS.

The Company  typically  acquires  distribution  rights in a motion picture for a
specified term in one or more territories and media. In some circumstances,  the
Company also acquires the copyright to the motion picture.  The arrangements the
Company enters into to acquire rights may include the Company agreeing to pay an
advance or minimum  guarantee for the rights acquired and/or agreeing to advance
print and  advertising  costs,  obligations  which are independent of the actual
financial  performance  of the  motion  picture  being  distributed.  The  risks
incurred by the Company  dramatically  increase to the extent the Company  takes
such actions.

The Company also incurs significant risk to the extent it engages in development
or  production  activities  itself.  The Company may, in certain  circumstances,
reduce some of the foregoing risks by sub-licensing  certain distribution rights
in  exchange  for  minimum   guarantees  from   sub-licensees  such  as  foreign
sub-distributors. The investment by the Company in a motion picture includes the
cost of acquisition of the distribution rights (including any advance or minimum
guarantee paid to the producer),  the amount of the production financed, and the
marketing and distribution costs borne.

SUBSTANTIAL COMPETITION.

The Company may experience substantial  competition in its efforts to locate and
attract  customers  for its products.  Many  competitors  in the motion  picture
industry have greater experience,  resources,  and managerial  capabilities than
the Company and may be in a better position than the Company to obtain access to
attractive products.  There are a number of larger companies which will directly
compete with the Company.  Such competition could have a material adverse effect
on the Company's profitability or viability.

OTHER EXTERNAL FACTORS MAY AFFECT VIABILITY OF COMPANY.

The motion  picture  industry in general is a  speculative  venture  necessarily
involving some substantial  risk. There is no certainty that the expenditures to
be made by the Company  will result in  commercially  profitable  business.  The
marketability  of its products will be affected by numerous  factors  beyond the
control of the Company.  These  factors  include  market  fluctuations,  and the
general  state of the  economy  (including  the  rate of  inflation,  and  local
economic conditions),  which can affect peoples' discretionary spending. Factors
which leave less money in the hands of  potential  customers of the Company will
likely have an adverse effect on the Company.  The exact effect of these factors
cannot be accurately predicted,  but the combination of these factors may result
in the Company not receiving an adequate return on invested capital.

CONTROL OF THE COMPANY BY OFFICERS AND DIRECTORS OVER AFFAIRS OF THE COMPANY.

The Company's officers and directors  beneficially own approximately 29.96% (see
"Security  Ownership  of  Certain  Beneficial  Owners  and  Management")  of the
outstanding  shares of the Company's  common stock.  As a result,  such persons,
acting  together,  have the ability to exercise  significant  influence over all
matters requiring stockholder approval.  Accordingly,  it could be difficult for
the investors  hereunder to effectuate  control over the affairs of the Company.
Therefore,  it should be assumed that the  officers,  directors,  and  principal
common  shareholders  who control these voting rights will be able, by virtue of
their stock holdings, to control the affairs and policies of the Company.

SUCCESS OF COMPANY DEPENDENT ON MANAGEMENT.

The  Company's  success  is  dependent  upon the  hiring  and  retention  of key
personnel.   None  of  the  officers  or  directors   has  any   employment   or
non-competition agreement with the Company. Therefore, there can be no assurance
that these  personnel will remain  employed by the Company.  Should any of these
individuals  cease to be  affiliated  with the  Company  for any  reason  before
qualified  replacements  could be found, there could be material adverse effects
on the Company's business and prospects.

In addition, all decisions with respect to the management of the Company will be
made  exclusively  by the officers and directors of the Company.  Investors will
only have rights  associated  with minority  ownership  interest  rights to make
decisions  which  affect the  Company.  The success of the  Company,  to a large
extent, will depend on the quality of the directors and officers of the Company.
Accordingly,  no person  should  invest in the  Shares  unless he is  willing to
entrust  all  aspects  of the  management  of the  Company to the  officers  and
directors.

                                       5
<PAGE>
CONFLICTS OF INTEREST MAY AFFECT INDEPENDENCE OF OFFICERS AND DIRECTORS.

The  officers  and  directors  have other  interests  to which they devote time,
either individually or through  partnerships and corporations in which they have
an  interest,  hold an office,  or serve on boards of  directors,  and each will
continue to do so notwithstanding the fact that management time may be necessary
to the business of the Company.  As a result,  certain conflicts of interest may
exist  between the Company and its officers  and/or  directors  which may not be
susceptible to resolution.

In  addition,  conflicts  of  interest  may  arise  in  the  area  of  corporate
opportunities which cannot be resolved through arm's length negotiations. All of
the potential  conflicts of interest  will be resolved only through  exercise by
the directors of such judgment as is consistent with their  fiduciary  duties to
the Company. It is the intention of management,  so as to minimize any potential
conflicts  of  interest,  to  present  first to the  Board of  Directors  to the
Company, any proposed investments for its evaluation.

LIMITATIONS  ON LIABILITY,  AND  INDEMNIFICATION,  OF DIRECTORS AND OFFICERS MAY
RESULT IN EXPENDITURES BY THE COMPANY.

The Company's Articles of Incorporation include provisions to eliminate,  to the
fullest extent  permitted by the Nevada Revised  Statutes as in effect from time
to time, the personal liability of directors of the Company for monetary damages
arising from a breach of their fiduciary duties as directors. The By-Laws of the
Company  include  provisions  to the effect that the Company may, to the maximum
extent permitted from time to time under applicable law, indemnify any director,
officer, or employee to the extent that such  indemnification and advancement of
expense is  permitted  under such law, as it may from time to time be in effect.
Any  limitation  on  the  liability  of  any  director,  or  indemnification  of
directors, officer, or employees, could result in substantial expenditures being
made by the Company in covering any liability of such persons or in indemnifying
them.

ABSENCE OF CASH DIVIDENDS.

The Board of Directors does not  anticipate  paying cash dividends on the common
stock for the  foreseeable  future and intends to retain any future  earnings to
finance the growth of the Company's business. Payment of dividends, if any, will
depend,  among other factors, on earnings,  capital requirements and the general
operating and financial  conditions of the Company as well as legal  limitations
on the payment of dividends out of paid-in capital.

NO CUMULATIVE VOTING.

Holders  of the  shares of  common  stock of the  Company  are not  entitled  to
accumulate their votes for the election of directors or otherwise.  Accordingly,
the  holders of a majority  of the shares  present at a meeting of  shareholders
will be able to elect all of the  directors  of the  Company,  and the  minority
shareholders  will not be able to elect a representative  to the Company's board
of directors.

NO ASSURANCE OF CONTINUED PUBLIC TRADING MARKET; RISK OF LOW PRICED SECURITIES.

Since June 27, 1997,  there has been only a limited public market for the common
stock of the Company.  The common stock of the Company is quoted on the Over the
Counter  Bulletin  Board.  As a result,  an investor  may find it  difficult  to
dispose  of, or to obtain  accurate  quotations  as to the  market  value of the
Company's securities. In addition, the common stock is subject to the low-priced
security or so called "penny stock" rules that impose  additional sales practice
requirements  on  broker-dealers  who  sell  such  securities.   The  Securities
Enforcement  and  Penny  Stock  Reform  Act  of  1990  ("Reform  Act")  requires
additional disclosure in connection with any trades involving a stock defined as
a penny stock (generally,  according to recent  regulations  adopted by the U.S.
Securities and Exchange Commission,  any equity security that has a market price
of less than $5.00 per share,  subject to  certain  exceptions),  including  the
delivery,  prior  to any  penny  stock  transaction,  of a  disclosure  schedule
explaining  the penny  stock  market  and the risks  associated  therewith.  The
regulations  governing low-priced or penny stocks sometimes limit the ability of
broker-dealers  to sell the  Company's  common stock and thus,  ultimately,  the
ability of the investors to sell their securities in the secondary market.

                                       6
<PAGE>
EFFECTS OF FAILURE TO MAINTAIN MARKET MAKERS.

If the  Company  is unable to  maintain  a National  Association  of  Securities
Dealers,  Inc.  member  broker/dealers  as market  makers,  the liquidity of the
common stock could be impaired, not only in the number of shares of common stock
which could be bought and sold, but also through  possible  delays in the timing
of  transactions,  and lower  prices for the common  stock than might  otherwise
prevail.  Furthermore,  the lack of market  makers could result in persons being
unable to buy or sell shares of the common stock on any secondary market.  There
can be no assurance the Company will be able to maintain such market makers.

ITEM 2. DESCRIPTION OF PROPERTY

The Company  currently rents its offices under a month to month lease for $2,500
per month from Franco Columbu, Chairman of the Board and Chief Executive Officer
of the Company.  The Company has approximately  $5,000 worth of office furniture
and equipment at this location.

ITEM 3. LEGAL PROCEEDINGS

The Company is not presently a party to any litigation,  nor to the knowledge of
management  is any  litigation  threatened  against  the  Company,  which  would
materially affect the Company.

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

No matter was submitted to a vote of security holders,  through the solicitation
of proxies or  otherwise,  during  the fourth  quarter of our fiscal  year ended
December 31, 2002.

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Our Common Stock is traded in the over-the-counter securities market through the
National  Association of Securities  Dealers Automated  Quotation Bulletin Board
System,  under the symbol "ECLE".  The following  table sets forth the quarterly
high and low bid prices for our Common  Stock as  reported  by the Pink  Sheets,
LLC.  The  quotations  reflect  inter-dealer  prices,  without  retail  mark-up,
markdown or commission, and may not necessarily represent actual transactions.

                                  Closing Ask            Closing Bid
                                  -----------            -----------
Date                              High    Low            High    Low
----                              ----    ---            ----    ---

2002

Jan 2 thru Mar 29                  .17    .11             .10    .08

Apr 1 thru June 28                 .10    .06             .08    .03

July 1 thru Sept 30                .05    .05             .02    .02

Oct 1 thru Dec 31                  .08    .04             .04    .01


As of April 13,  2002,  we had  approximately  71  stockholders  of record  (not
including  shares held by brokers or in street  name) of the  18,354,321  shares
outstanding. We have never declared or paid dividends on our Common Stock.

We intend to follow a policy of  retaining  earnings,  if any,  to  finance  the
growth of the business and do not  anticipate  paying any cash  dividends in the
foreseeable  future.  The  declaration  and payment of future  dividends  on the
Common  Stock will be the sole  discretion  of the Board of  Directors  and will
depend on our  profitability  and  financial  condition,  capital  requirements,
statutory  and  contractual  restrictions,  future  prospects  and other factors
deemed relevant.

SALES OF UNREGISTERED SHARES

In October of 2002,  the Company  issued  500,000  shares of common  stock to an
individual based upon expenses claimed by the individual.  The Company has since
determined that the expenses were not valid and has cancelled the 500,000 shares
issued.

                                       7
<PAGE>
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

This report contains  forward-looking  statements  within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934. Actual results and events could differ materially from those projected,
anticipated,  or implicit, in the forward-looking  statements as a result of the
risk factors set forth below and elsewhere in this report. With the exception of
historical matters,  the matters discussed herein are forward looking statements
that involve risks and uncertainties.  Forward looking statements  include,  but
are not limited to, statements concerning anticipated trends in revenues and net
income,  the date of  introduction  or completion  of our products,  projections
concerning  operations  and available cash flow. Our actual results could differ
materially from the results discussed in such  forward-looking  statements.  The
following discussion of our financial condition and results of operations should
be read in  conjunction  with our  financial  statements  and the related  notes
thereto appearing elsewhere herein.

BUSINESS STRATEGY

The overall strategic plan for Eclipse was to generate  sufficient  profits from
the  distribution of low to medium budget feature films to finance future films.
These films were produced and/or acquired by Eclipse for worldwide distribution.
Eclipse created its own sales and marketing department in 2002, which eliminated
the  reliance  upon  Westar.  As a result of the failure to secure  satisfactory
sales of its film  assets the Company  will not be  expending  further  funds to
expand its operations.  The Company will instead focus upon  generating  revenue
from the film that it produced and securing a new business or direction  for the
Company.

TWELVE MONTH PLAN OF OPERATION.

For the period from the  Registrant's  inception  through the period reported by
this Form  10-KSB,  there  have been  limited.  Operating  activities  have been
related  primarily to establishing the management and operating  infrastructure,
as well as the distribution of the movie,  Ancient Warriors.  The Registrant has
terminated  all  distribution  agreements for  productions  which it acquired in
order to  concentrate  its efforts on  generating  revenue from sales of Ancient
warriors  by its  subsidiary  Eclipse  Releasing,  Inc.  and in  securing  a new
business  or  enterprise  for  the  Company.  There  is no  assurance  that  the
Registrant will be successful in addressing these needs.

GENERAL AND ADMINISTRATIVE EXPENSES

General  and  administrative  expenses  consist  of  related  general  corporate
functions,  including  marketing  expenses,  professional  service  expenses and
travel. The Registrant  expects general and administrative  expenses to decrease
as it limits its  activities  to promoting  and  marketing  its motion  picture,
Ancient Warriors.  General and administrative  expenses totaled $405,432 for the
fiscal year ended December 31, 2002, as compared to  $555,311.00  for the fiscal
year ended  December 31, 2001.  This  decrease was due to a  termination  of all
staff and costs associated with the promotion of Ancient Warriors. This decrease
in expenses are to be expected in years where the company is not involved in the
production and distribution of new films.

NET LOSS

The Company  incurred a net loss of $458,858 for the fiscal year ended  December
31,  2002,  as  compared  to net loss of  $1,089,000  in the  fiscal  year ended
December 31, 2001.

LIQUIDITY AND CAPITAL RESOURCES

The  Company's  current  liabilities  exceed  its  current  assets by a total of
$110,730 for the fiscal year ended December 31, 2002. Additionally approximately
$84,569 of the Company's accounts payable are currently past due. As of December
31, 2002,  the Company had an  accumulated  deficit of  $2,271,080.  This raises
substantial doubt about the Company's ability to continue as a going concern.

Film costs represented a major component of the Registrant's former assets. Film
costs  represent  those costs incurred in the  acquisition  and  distribution of
motion pictures or in the acquisition of distribution rights to motion pictures.
This  includes  minimum  guarantees  paid to  producers  or other owners of film
rights,  recoupable  distribution and production  costs. The Registrant has been
unable to generate any significant  revenue from its film assets and has treated
them as impaired in the financial  statements  resulting in a one-time charge of
$3,425,735.

                                       8
<PAGE>
The Registrant has entered into an agreement with its  noteholders  whereby they
forgave the $3,709,575  currently  owing to them by the Company.  Pursuant to an
agreement dated Dec 30th, 2002 see exhibit 10.3 whereby the Company's  rights to
the film were  transferred  to Eclipse  Releasing  and the investors in the film
agreed to  forgive  the  Company's  obligations  to them under  their  notes and
received Preferred shares in Eclipse Releasing.  The Preferred shares in Eclipse
Releasing  allow the  investors  to receive  all  proceeds  from the film,  less
expenses, until their Preferred shares are fully redeemed.

Current  funds  available  to the  Company  will  not be  adequate  for it to be
competitive in the areas in which it intends to operate.  Therefore, the Company
will need to raise  additional  funds in order to fully  implement  its business
plan.  The Company will attempt to raise  approximately  $500,000 in  additional
funds during the next 12 months through a private  placement.  These monies will
be used for film sales and general operating expenses.  However, there can be no
assurance that the Company will be successful in raising such additional  funds.
Regardless of whether the  Company's  cash assets prove to be inadequate to meet
the Company's  operational needs, the Company might seek to compensate providers
of services by issuance of stock in lieu of cash.

ITEM 7. FINANCIAL STATEMENTS

Financial  statements  as of and for the  year  ended  December  31,  2002,  and
December 31, 2001 are presented in Item 13 of this report

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

a) Dismissal of Previous Independent Accountants

     On April 10, 2003 Eclipse  Entertainment  Group,  Inc.  (the  "Registrant")
dismissed L.L.  Bradford & Company LLC ("Bradford"),  as its independent  public
accountants.  The Registrant's  Board of Directors  participated in and approved
the decision to dismiss Bradford.

     The reports of Bradford on the  Registrant's  financial  statements for the
two fiscal  years  ended  December  31,  2001 and 2000 do not contain an adverse
opinion or a disclaimer of opinion,  nor were such reports qualified or modified
as to uncertainty,  audit scope or accounting  principles except that the report
for the year ended December 31, 2001 included a paragraph on the  uncertainty of
the Registrant to continue as a going concern as follows:

     "The Company incurred a net loss of  approximately  $1,089,000 and $148,000
for the years  ended  December  31,  2001 and 2000,  respectively,  and  current
liabilities exceed current assets by approximately $3,062,000 as of December 31,
2001. The Company plans to earn revenue  through the release of completed  films
during 2002. The Company will also seek  additional  sources of capital  through
the  issuance of debt or equity  financing,  but there can be no  assurance  the
Company will be successful in accomplishing its objectives.

     The ability of the Company to continue as a going  concern is  dependent on
additional  sources  of  capital  and the  success of the  Company's  plan.  The
financial  statements do not include any adjustments  that might be necessary if
the Company is unable to continue as a going concern."

     During the  preceding  two fiscal years and through  April 10, 2003,  there
were no  disagreements  between  the  Registrant  and  Bradford on any matter of
accounting  principles or practices,  financial statement  disclosure,  or audit
scope or procedure,  which,  if not resolved to Bradford's  satisfaction,  would
have  caused   Bradford  to  make   reference  to  the  subject  matter  of  the
disagreements in connection with Bradford's report on the Registrant's financial
statements.

     During the  preceding  two fiscal years and through  April 10, 2003,  there
were  no  reportable   events   required  to  be  disclosed   pursuant  to  Item
304(a)(1)(v).

     Pursuant to Item  304(a)(3),  on April 14,  2003,  Bradford  furnished  the
Registrant a letter addressed to the Securities and Exchange  Commission stating
it agrees with the statements made by the Registrant in response to Item 304(a).

(b) Engagement of New Independent Accountants.

     Registrant  has  appointed   Beckstead  and  Watts,  LLP,  as  Registrant's
independent  accountants  for the fiscal  year ending  December  31,  2002.  The
decision to accept the  engagement of Beckstead  and Watts,  LLP was approved by
the Audit  Committee of the Board of Directors on April 10, 2003.  Beckstead and
Watts,  LLP  will be  performing  the  annual  audit of  Registrant's  financial
statements for the year ending December 31, 2002.  Beckstead and Watts,  LLP was
engaged by Registrant on April 10, 2003.

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

The names, ages, and respective  positions of the directors,  executive officers
and key employees of Eclipse are set forth below. The directors named below will
serve until the next annual  meeting of  Eclipse's  stockholders  or until their
successors  are duly  elected and have  qualified.  Directors  are elected for a
one-year  term at the annual  stockholders'  meeting.  Officers  will hold their
positions  at  the  will  of the  board  of  directors,  absent  any  employment
agreement,  of which  none  currently  exist or are  contemplated.  There are no
arrangements,  agreements or understandings between non-management  shareholders
and  management  under  which   non-management   shareholders  may  directly  or
indirectly  participate  in or influence the  management  of Eclipse's  affairs.
There are no other promoters or control  persons of Eclipse.  There are no legal
proceedings involving the directors of Eclipse.

FRANCO COLUMBU, CHAIRMAN OF THE BOARD & CEO, 61

Dr.  Columbu  oversees  all film  and  television  activities  of  Eclipse.  Dr.
Columbu's  career in bodybuilding  and power lifting has earned him major titles
including the MR. OLYMPIA,  MR. WORLD, and MR. UNIVERSE titles.  Dr. Columbu has
appeared in PUMPING IRON,  STAY HUNGRY,  CONAN THE  BARBARIAN,  RUNNING MAN, and
TERMINATOR. He has produced two feature films, BERETTA'S ISLAND and DOUBLECROSS,
through his production company Franco Columbu Productions, Inc. and is currently
Producer of the Company's current feature,  ANCIENT  WARRIORS.  He has also been
featured in several  national  commercials  and been a guest on talk  shows.  In
addition  to his film  industry  experience,  Dr.  Columbu  maintains  an active
chiropractic  practice and has been providing  private health  consultation  for
over ten years. Dr. Columbu has served as CEO and a Director of the Company from
05/99 - Present and added the title of Chairman from 10/00 - Present.

ART BIRZNECK, PRESIDENT & CFO/DIRECTOR, 34

Mr.  Birzneck has been with Eclipse since its inception and is  responsible  for
overseeing all  operational  activities and the  development of its domestic and
international  ventures. He is Executive Producer of the Company's first feature
film, THE PROCESS and current feature,  ANCIENT WARRIORS.  Prior to Eclipse, Mr.
Birzneck spent three years as president of Pinoy Productions, Inc., a Vancouver,
Canada based production company. He has participated financially in several film
projects including THE PROCESS and ANCIENT WARRIORS and HPP Production's HERO OF
THE PLANET.  Mr. Birzneck also has been involved in promoting  numerous  Hip-Hop
music groups.  As a principal of MB  Productions,  his clients  included Hip Hop
artists  CANDY MAN,  LIGHTER  SHADE OF BROWN and the RASCALZ.  Mr.  Birzneck has
served as President  and as a Director of the Company  from 06/97 - Present.  In
12/02 Mr. Birzneck became the CFO of the Company

BRENT NELSON, DIRECTOR, 42

Mr. Nelson has been with Eclipse since its inception.  He has more than 15 years
experience  in  corporate  and  project  financing  and  serves on the boards of
Esarati  Electric  Technologies  Inc.,  Polar  Cargo  Systems  Inc.,  Mobile PET
Technologies Inc., and Innovative Communications Technologies Inc. Approximately
six years ago, he founded and became  Managing  Director  of  Northwest  Capital
Partners, L.L.C. a Bellevue, Washington based venture capital company. Northwest
Capital is very active in both private and public  financing on an international
basis.  Mr. Nelson is also an executive  producer of the Company's  feature film
ANCIENT WARRIORS.  Mr. Nelson has served as a Director of the Company from 06/97
- Present. Mr. Nelson has served as Treasurer of the Company from 06/97 - 12/02.

COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.

Section 16(a) of the Securities  Exchange Act of 1934 requires the  Registrant's
directors,  certain officers and persons holding 10% or more of the Registrant's
common stock to file reports  regarding  their  ownership  and  regarding  their
acquisitions  and  dispositions  of  the  Registrant's  common  stock  with  the
Securities and Exchange Commission. Such persons are required by SEC regulations
to furnish the Registrant with copies of all Section 16(a) forms they file.

                                       10
<PAGE>
ITEM 10. EXECUTIVE COMPENSATION.

The following  officers and  directors  received  restricted  shares for partial
payment of unpaid salaries  pursuant to a Board Resolution on August 7th of this
year pursuant to the following table:

Name                       Position                # of restricted shares issued
----                       --------                -----------------------------
Franco Columbu         CEO/Director                          1,000,000
Art Birzneck           President/Director                      750,000

Franco Columbu received  1,000,000 shares in satisfaction of a one time $100,000
annual salary and Art Birzneck  received 750,000 shares in satisfaction of a one
time $75,000  annual  salary.  The salaries are payable only for their  services
during 2002. The shares were issued at a share price of $0.10 per share.

Art Birzneck has yet to receive  85,000  restricted  shares owed to him for past
services  pursuant to a Board  Resolution  dated July 1st of 2001.  These shares
remain unissued.  There are no annuity,  pension or retirement benefits proposed
to be paid to officers,  directors,  or employees of the Registrant in the event
of  retirement at normal  retirement  date as there is no existing plan provided
for or contributed to by the Registrant.

Other than as set forth  below,  no  remuneration  is proposed to be paid in the
future directly or indirectly by the Registrant to any officer or director since
there is no existing plan which  provides for such payment:  At a meeting of the
Board  of  Directors  on  October  23,  2000,   the   Registrant   approved  the
establishment of an Incentive Stock Option Pool of 2,000,000 shares,  and that a
Non-Qualified  Stock Option Pool of 2,500,000 shares, with options to be granted
by the  Company's  Compensation  Committee on such terms as that  Committee  may
determine, within the terms and conditions of an Incentive Stock Option Plan and
a Non-Qualified Stock Option Plan. No options have been granted under this plan.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

The following  table sets forth certain  information as of April 15th, 2003 with
respect to the  beneficial  ownership  of common stock by (i) each person who to
the  knowledge  of the Company,  beneficially  owned or had the right to acquire
more than 5% of the Outstanding  common stock, (ii) each director of the Company
and (iii) all executive offices and directors of the Company as a group.

Title of           Name and Address                Amount of            Percent
 Class           of Beneficial Owner          Beneficial Ownership      of Class
 -----           -------------------          --------------------      --------

Common               Brent Nelson                 2,771,270 (2)          15.09%
Stock           10900 N.E. 8th Street
                  Bellevue, WA 98004

Common             Art Birzneck(3)                1,274,500                6.94%
Stock           10520 Venice Boulevard
            Culver City, California 90232

Common             Franco Columbu,                1,253,750                6.83%
Stock           10520 Venice Boulevard
            Culver City, California 90232

Common       Shares Of All Directors and
Stock       executive officers as a group         5,499,520               29.96%
                     (3 persons)

----------
(1)  Except as noted in footnote 2 below,  each person has sole voting power and
     sole dispositive power as to all of the shares shown as beneficially  owned
     by them
(2)  This figure  includes  the  2,605,520  shares  owned by  Northwest  Capital
     Partners, L.L.C., 10900 N.E. 8th Street, Bellevue,  Washington 98004, since
     Mr. Nelson is the managing director of this firm.
(3)  This figure does not represent  85,000 shares that have been  authorized by
     the Board of Directors but remain unissued.

                                       11
<PAGE>
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

Other  than as set forth  below,  during  the past two years  there have been no
relationships,  transactions,  or proposed  transactions to which the Registrant
was or is to be a party, in which any of the named persons set forth  previously
had or is to have a direct or indirect material interest.

(a) Northwest  Capital  Partners,  L.L.C. has advanced the Registrant the sum of
$995,040.  There  are  no  specific  repayment  terms  on  this  advance,  it is
unsecured,  with an imputed  interest  at 8%, and due on demand.  The purpose of
this advance was that the  Registrant  required  additional  funding to continue
operating.  This note was forgiven  pursuant to Exhibit 10.3.  Northwest Capital
Partners received Preferred shares in Eclipse Releasing.

(b) The Company  currently  rents its  offices  under a month to month lease for
$2,500 per month from Franco Columbu,  Chairman of the Board and Chief Executive
Officer of the Company.

(c) Franco  Columbu,  the  Company's  Director and CEO,  will receive 10% of the
profits from the film Ancient Warriors.  Further,  Mr. Columbu directly owns 30%
of the film Ancient Warriors.

(d) Art Birzneck,  the Company's  President,  will receive 10% of the profits of
Ancient Warriors as Executive Producer fees.

For each of the transactions noted above, the transaction was negotiated, on the
part of the  Registrant,  on the basis of what is in the best  interests  of the
Registrant  and its  shareholders.  In  addition,  in each  case the  interested
affiliate  did vote in  favor of the  transaction;  however,  the full  board of
directors  did  make the  determination  that the  terms  in each  case  were as
favorable as could have been obtained from non-affiliated parties.

Certain of the officers and  directors  of the  Registrant  are engaged in other
businesses,  either  individually or through  partnerships  and  corporations in
which they have an interest,  hold an office,  or serve on a board of directors.
As a result,  certain potential  conflicts of interest,  such as those set forth
above with the  transactions,  may arise between the Registrant and its officers
and directors. The Registrant will attempt to resolve such conflicts of interest
in favor of the Registrant by carefully  reviewing each proposed  transaction to
determine its fairness to the  Registrant and its  shareholders  and whether the
proposed terms of the transaction are at least as favorable as those which could
be  obtained  from  independent  sources.  The  officers  and  directors  of the
Registrant are  accountable to it and its  shareholders  as  fiduciaries,  which
requires that such  officers and directors  exercise good faith and integrity in
handling the Registrant's  affairs. A shareholder may be able to institute legal
action on behalf of the  Registrant  or on behalf of itself and other  similarly
situated  shareholders  to recover  damages or for other  relief in cases of the
resolution of conflicts is in any manner prejudicial to the Registrant.

                                       12
<PAGE>
ITEM 13. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.

(a)

BECKSTEAD AND WATTS, LLP
CERTIFIED PUBLIC ACCOUNTANTS
3340 Wynn Rd., Ste. B
Las Vegas, NV 89102
702.257.1984
702.362.0540 (fax)
<PAGE>
INDEPENDENT AUDITORS' REPORT

Board of Directors
Eclipse Entertainment Group, Inc.
Las Vegas, NV

We have audited the Balance  Sheet of Eclipse  Entertainment  Group,  Inc.  (the
"Company"),  as of December 31, 2002, and the related  Statements of Operations,
Stockholders' Equity, and Cash Flows for the year ended December 31, 2002. These
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

We conducted our audit in accordance with generally  accepted auditing standards
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statement  presentation.   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
audit provides a reasonable basis for opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the balance sheet of Eclipse  Entertainment Group, Inc.,
as of December 31, 2002, and its related  statements of  operations,  equity and
cash flows for the year ended  December 31, 2002, in conformity  with  generally
accepted accounting principles in the United States of America.

The accompanying  financial  statements have been prepared  assuming the Company
will  continue  as a going  concern.  As  discussed  in Note 2 to the  financial
statements,  the  Company  has had  limited  operations  and have not  commenced
planned principal operations. This raises substantial doubt about its ability to
continue as a going  concern.  Management's  plan in regard to these matters are
also  described  in  Note  2.  The  financial  statements  do  not  include  any
adjustments that might result from the outcome of this uncertainty.

Signed,

/s/ BECKSTEAD AND WATTS, LLP
BECKSTEAD AND WATTS, LLP

                                 April 15, 2003

                                       13
<PAGE>
                        ECLIPSE ENTERTAINMENT GROUP, INC.


                                  BALANCE SHEET
                                      AS OF
                                DECEMBER 31, 2002

                                       AND

                            STATEMENT OF OPERATIONS,
                            STOCKHOLDERS' EQUITY, AND
                                   CASH FLOWS
                               FOR THE YEAR ENDED
                                DECEMBER 31, 2002

                                       14
<PAGE>
TABLE OF CONTENTS

                                                                            PAGE
                                                                            ----
INDEPENDENT AUDITORS' REPORT                                                 13

Balance Sheet                                                                17

Statement of Operations                                                      18

Statement of Stockholders' Equity                                            19

Statement of Cash Flows                                                      20

Footnotes                                                                    21

                                       15
<PAGE>
BECKSTEAD AND WATTS, LLP
CERTIFIED PUBLIC ACCOUNTANTS
3340 Wynn Road, Ste B.
Las Vegas, NV 89102
702.257.1984
702.362.0540 (fax)

To Whom It May Concern:

The firm of Beckstead and Watts, LLP, consents to the inclusion of its report of
April 15, 2003, on the Financial Statements of Eclipse Entertainment Group, Inc.
for the year ended  December 31, 2002,  in its Form 10SB to be filed with the US
Securities and Exchange Commission.

Signed,

/s/ BECKSTEAD AND WATTS, LLP
BECKSTEAD AND WATTS, LLP

April 15, 2003

                                       16
<PAGE>
                         ECLIPSE ENTERTAINMENT GROUP, INC.
                            Consolidated Balance Sheet



                                                               December 31, 2002
                                                               -----------------
ASSETS

Current assets:
    Cash and cash equivalent                                      $    36,991
                                                                  -----------
    Total current assets

Other asset
    Deposit                                                               800
                                                                  -----------

                                                                  $    37,791
                                                                  ===========


LIABILITIES AND STOCKHOLDERS' (DEFICIT)

Current liabilities:
    Accounts payable                                                   86,569
    Loan from shareholder                                              61,952
                                                                  -----------
    Total current liabilities                                         148,521

Stockholders' (deficit):

    Preferred stock, $.001 par value, 10,000,000 shares
      authorized, no shares issued and outstanding                         --
    Common stock, $0.001 par value, 50,000,000 shares
      authorized, 18,354,321 shares issued and outstanding             18,354
    Additional paid-in capital                                      2,141,996
    Retained (deficit)                                             (2,271,080)
                                                                  -----------
                                                                     (110,730)
                                                                  -----------

                                                                  $    37,791
                                                                  ===========

                                       17
<PAGE>
                        ECLIPSE ENTERTAINMENT GROUP, INC.
                      Consolidated Statements of Operations

                                                       For the Years Ended
                                                  -----------------------------
                                                  December 31,     December 31,
                                                      2002            2001
                                                  ------------    ------------
Revenue                                           $      1,500     $        --

Expenses
   Selling, general and administrative expenses         42,751         555,311
   Consulting                                          127,800              --
   Payroll expense                                      45,000              --
   Travel expense                                      111,710              --
   Professional fees                                    78,171              --
                                                  ------------    ------------
                                                       405,432         555,311
                                                  ------------    ------------
                                                      (403,932)       (555,311)

Other income (loss):
   Interest expense                                   (338,766)       (180,027)
   Gain on forgiveness of debt                       3,709,575
   Impairment on capitalized film costs             (3,425,735)       (353,463)
                                                  ------------    ------------
                                                       (54,926)       (533,490)

Net (loss)                                        $   (458,858)   $ (1,088,801)
                                                  ============    ============
Stockholders' Equity:
Weighted average number of common
  shares outstanding - basic and fully diluted      16,541,287      13,958,343
                                                  ============    ============

Net (loss) per share - basic and fully diluted    $      (0.03)   $      (0.08)
                                                  ------------    ------------

                                       18
<PAGE>
                        ECLIPSE ENTERTAINMENT GROUP, INC.
           Consolidated Statements of Changes in Stockholders' Equity

<TABLE>
<CAPTION>
                                                                   Common Stock            Additional                     Total
                                                             --------------------------      Paid-in      Retained     Stockholders'
                                                               Shares         Amount         Capital      (Deficit)       Equity
                                                             -----------    -----------    -----------   -----------    -----------
<S>                                                          <C>           <C>            <C>           <C>            <C>
Balance as of December 31, 2000                               12,758,641    $    12,758    $ 1,636,337   $  (723,421)   $   925,674

Shares issued for services                                       100,000            100         81,150                       81,250

Shares issued for cash                                           167,000            167         49,833                       50,000

Shares issued for services                                        24,000             24         11,976                       12,000

Deemed interest expense relate to
  conversion features of note payable                                                           41,700                       41,700

Stock issued for services                                        190,000            190         58,710                       58,900

Stock issued for services                                         40,000             40          7,960                        8,000

Shares issued for interest                                       200,000            200         23,800                       24,000

Shares issued for services                                        62,180             62          8,643                        8,705

Shares issued for services                                        20,000             20          2,380                        2,400

Shares issued for services                                        10,000             10            990                        1,000

Shares issued for interest                                       200,000            200         23,800                       24,000

Shares issued for interest                                       200,000            200         23,800                       24,000

Net (loss) for the year ended December 31, 2001                                                           (1,088,801)    (1,088,801)
                                                             -----------    -----------    -----------   -----------    -----------

Balance as of December 31, 2001                               13,971,821         13,971      1,971,079    (1,812,222)       172,828

Shares issued for interest and default penalties
 on debt                                                         837,500            838         32,663                       33,501

Shares issued for services                                     3,545,000          3,545        138,255                      141,800

Net (loss) for the year ended December 31, 2002                                                             (458,858)      (458,858)
                                                             -----------    -----------    -----------   -----------    -----------

Balance as of December 31, 2002                               18,354,321    $    18,354    $ 2,141,997    (2,271,080)      (110,730)
                                                             ===========    ===========    ===========   ===========    ===========
</TABLE>

                                       19
<PAGE>
                        ECLIPSE ENTERTAINMENT GROUP, INC.
                      Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>
                                                                              For the Years Ended
                                                                           ---------------------------
                                                                           December 31,   December 31,
                                                                              2002           2001
                                                                           -----------    -----------
<S>                                                                        <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Net (loss)                                                              $  (458,858)   $(1,088,801)
   Adjustments to reconcile net (loss)
     to cash provided (used) by operating activities:
     Depreciation expense                                                           --         42,171
     Shares issued for services and expenses                                   141,800        244,255
     Shares issued for debt                                                     33,501             --
     Impairment on capitalized film costs                                    3,425,735        353,463
     Gain on forgiveness of debt                                            (3,709,575)
   Changes in assets and liabilities:
     (Increase) decrease in film costs                                      (1,406,291)
     Increase in deposits                                                           --           (115)
     Increase (Decrease) in accounts payable and accrued liabilities                --        288,140
                                                                           -----------    -----------
Net cash (used) by operating activities                                       (567,398)    (1,567,178)
                                                                           -----------    -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Net cash provided by investing activities                                           --             --
                                                                           -----------    -----------
CASH FLOWS FROM FINANCING ACTIVITIES
   Net increase (decrease) in due to related parties                                --        632,088
   Loan from shareholder                                                        61,952             --
   Proceeds from notes payable                                                 539,772        935,000
                                                                           -----------    -----------
Net cash provided by financing activities                                      601,724      1,567,088
                                                                           -----------    -----------

Net (decrease) in cash                                                          34,327            (90)
Cash and equivalents - beginning                                                 2,669          2,759
                                                                           -----------    -----------
Cash and equivalents - ending                                              $    36,996    $     2,669
                                                                           ===========    ===========
Supplemental disclosures:
   Non-cash transactions:
     Interest paid                                                         $   338,766    $    49,998
                                                                           ===========    ===========
     Income taxes paid                                                     $        --    $    49,999
                                                                           ===========    ===========
     Loan fees                                                             $        --    $    50,000
                                                                           ===========    ===========
     Shares issued to satisfy stock subscriptions payable                  $        --    $    50,000
                                                                           ===========    ===========
     Shares issued for services                                              3,545,000        446,180
                                                                           ===========    ===========
     Shares issued for debt settlement                                         837,500        600,000
                                                                           -----------    -----------
</TABLE>

                                       20
<PAGE>
                        ECLIPSE ENTERTAINMENT GROUP, INC.
                   Notes to Consolidated Financial Statements

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES AND PROCEDURES

ORGANIZATION

     Eclipse   Entertainment  Group,  Inc.   (hereinafter  referred  to  as  the
     "Company")  was  incorporated  in the State of Nevada  in  January  1997 to
     engage in the business of  developing,  producing and  marketing  films for
     worldwide distribution. The Company's fiscal year ends on December 31.

CASH AND CASH EQUIVALENTS

     The Company maintains a cash balance in a non-interest-bearing account that
     currently does not exceed federally insured limits.  For the purpose of the
     statements of cash flows,  all highly liquid  investments  with an original
     maturity of three  months or less are  considered  to be cash  equivalents.
     There are no cash equivalents as of December 31, 2002.

INVESTMENTS

     Investments  in  companies  over which the  Company  exercises  significant
     influence  are  accounted  for by the equity  method  whereby  the  Company
     includes its  proportionate  share of earnings and losses of such companies
     in  earnings.  Other  long-term  investments  are  recorded at cost and are
     written down to their estimated  recoverable amount if there is evidence of
     a decline in value which is other than temporary.

PROPERTY, PLANT AND EQUIPMENT

     Property,  plant and equipment are stated at the lower of cost or estimated
     net  recoverable  amount.  The cost of  property,  plant and  equipment  is
     depreciated  using  the  straight-line  method  based on the  lesser of the
     estimated  useful  lives  of the  assets  or the  lease  term  based on the
     following life expectancy:

          Computer equipment                   5 years
          Office furniture and fixtures        7 years

     Repairs and maintenance expenditures are charged to operations as incurred.
     Major  improvements  and  replacements,  which extend the useful life of an
     asset, are capitalized and depreciated over the remaining  estimated useful
     life of the asset.  When assets are retired or sold,  the costs and related
     accumulated  depreciation and amortization are eliminated and any resulting
     gain or loss is reflected in operations.

REVENUE RECOGNITION

     All revenue is  recognized  upon meeting all  recognition  requirements  of
     AICPA Statement of Position 00-2,  "Accounting by Producers or Distributors
     of Films" ("SOP 00-2").  Revenues from  theatrical  distribution of feature
     films are recognized on the dates of exhibition.  Revenues from  television
     licensing,  together with related costs,  are  recognized  when the feature
     film or television program is available to the licensee for telecast.

ADVERTISING COSTS

     The Company  expenses all costs of advertising  as incurred.  There were no
     advertising  costs  included in general and  administrative  expenses as of
     December 31, 2002.

USE OF ESTIMATES

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

FAIR VALUE OF FINANCIAL INSTRUMENTS

     Fair  value  estimates  discussed  herein  are based  upon  certain  market
     assumptions  and  pertinent  information  available  to  management  as  of
     December   31,   2002.   The   respective   carrying   value   of   certain
     on-balance-sheet  financial  instruments  approximated  their fair  values.
     These financial  instruments include cash and accounts payable. Fair values
     were assumed to approximate  carrying values for cash and payables  because
     they are short term in nature and their carrying  amounts  approximate fair
     values or they are payable on demand.

IMPAIRMENT OF LONG-LIVED ASSETS

     The Company reviews its long-lived  assets and intangibles  periodically to
     determine  potential  impairment  by comparing  the  carrying  value of the
     long-lived  assets with the estimated  future cash flows expected to result
     from the use of the assets,  including cash flows from disposition.  Should
     the sum of the expected  future cash flows be less than the carrying value,
     the Company would recognize an impairment loss. An impairment loss would be
     measured by comparing  the amount by which the carrying  value  exceeds the
     fair value of the long-lived assets and intangibles. The Company determined
     its film production  rights would not be generating  significant  operating
     revenues in the near future and therefore  recognized a $3,425,735 loss due
     to impairment of film rights.

                                       21
<PAGE>
                        ECLIPSE ENTERTAINMENT GROUP, INC.
                   Notes to Consolidated Financial Statements

REPORTING ON THE COSTS OF START-UP ACTIVITIES

     Statement of Position 98-5 (SOP 98-5),  "Reporting on the Costs of Start-Up
     Activities," which provides guidance on the financial reporting of start-up
     costs and organizational  costs, requires most costs of start-up activities
     and organizational costs to be expensed as incurred.  SOP 98-5 is effective
     for fiscal years  beginning  after December 15, 1998.  With the adoption of
     SOP 98-5,  there has been  little or no effect on the  Company's  financial
     statements.

LOSS PER SHARE

     Net loss per share is provided in  accordance  with  Statement of Financial
     Accounting  Standards No. 128 (SFAS #128) "Earnings Per Share".  Basic loss
     per share is computed by dividing losses  available to common  stockholders
     by the weighted  average  number of common  shares  outstanding  during the
     period.  As of December 31, 2002, the Company had no dilutive  common stock
     equivalents, such as stock options or warrants.

DIVIDENDS

     The Company has not yet adopted any policy regarding  payment of dividends.
     No dividends have been paid or declared since inception.

COMPREHENSIVE INCOME

     SFAS No. 130, "Reporting  Comprehensive Income",  establishes standards for
     the reporting and display of comprehensive income and its components in the
     financial  statements.  The  Company  had no items  of other  comprehensive
     income and therefore has not presented a statement of comprehensive income.

SEGMENT REPORTING

     The Company follows  Statement of Financial  Accounting  Standards No. 130,
     "Disclosures About Segments of an Enterprise and Related  Information." The
     Company operates as a single segment and will evaluate  additional  segment
     disclosure requirements as it expands its operations.

INCOME TAXES

     The Company  follows  Statement of Financial  Accounting  Standard No. 109,
     "Accounting  for Income Taxes" ("SFAS No. 109") for recording the provision
     for income taxes.  Deferred tax assets and  liabilities  are computed based
     upon the difference between the financial statement and income tax basis of
     assets and liabilities  using the enacted marginal tax rate applicable when
     the  related  asset or  liability  is  expected  to be realized or settled.
     Deferred  income tax  expenses or benefits  are based on the changes in the
     asset or liability each period.  If available  evidence suggests that it is
     more likely than not that some  portion or all of the  deferred  tax assets
     will not be  realized,  a  valuation  allowance  is  required to reduce the
     deferred  tax  assets  to the  amount  that is more  likely  than not to be
     realized.  Future changes in such  valuation  allowance are included in the
     provision for deferred income taxes in the period of change.

     Deferred income taxes may arise from temporary  differences  resulting from
     income and expense items reported for financial accounting and tax purposes
     in  different  periods.   Deferred  taxes  are  classified  as  current  or
     non-current,  depending on the  classification of assets and liabilities to
     which they relate.  Deferred taxes arising from temporary  differences that
     are not  related  to an asset or  liability  are  classified  as current or
     non-current depending on the periods in which the temporary differences are
     expected to reverse.

RECENT PRONOUNCEMENTS

     In July  2002,  the  FASB  issued  SFAS  No.  146,  "Accounting  for  Costs
     Associated with Exit or Disposal  Activities",  which  addresses  financial
     accounting  and  reporting  for  costs  associated  with  exit or  disposal
     activities and supersedes EITF No. 94-3, "Liability Recognition for Certain
     Employee   Termination  Benefits  and  Other  Costs  to  Exit  an  Activity
     (including  Certain  Costs  Incurred  in a  Restructuring)."  SFAS No.  146
     requires  that a liability for a cost  associated  with an exit or disposal
     activity be recognized when the liability is incurred. Under EITF No. 94-3,
     a  liability  for an exit cost was  recognized  at the date of an  entity's
     commitment  to an exit  plan.  SFAS  No.  146  also  establishes  that  the
     liability  should  initially be measured  and  recorded at fair value.  The
     provisions of SFAS No. 146 will be adopted for exit or disposal  activities
     that are initiated after December 31, 2002.

     In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based
     Compensation--Transition  and  Disclosure--an  amendment  of SFAS No. 123."
     This  Statement   amends  SFAS  No.  123,   "Accounting   for   Stock-Based
     Compensation", to provide alternative methods of transition for a voluntary
     change  to the fair  value  based  method  of  accounting  for  stock-based
     employee  compensation.  In addition,  this statement amends the disclosure
     requirements  of SFAS No.  123 to  require  prominent  disclosures  in both
     annual and interim financial  statements about the method of accounting for
     stock-based  employee  compensation  and the effect of the  method  used on
     reported  results.  The  adoption of SFAS No. 148 is not expected to have a
     material  impact  on  the  company's   financial  position  or  results  of
     operations.

                                       22
<PAGE>
                        ECLIPSE ENTERTAINMENT GROUP, INC.
                   Notes to Consolidated Financial Statements

     In  November  2002,  the FASB issued  FASB  Interpretation  ("FIN") No. 45,
     "Guarantors   Accounting  and  Disclosure   Requirements   for  Guarantees,
     Including   Indirect   Guarantees   and   Indebtedness   of   Others",   an
     interpretation  of FIN No. 5, 57 and 107,  and  rescission  of FIN No.  34,
     "Disclosure  of Indirect  Guarantees  of  Indebtedness  of Others".  FIN 45
     elaborates  on the  disclosures  to be made by the guarantor in its interim
     and  annual  financial  statements  about  its  obligations  under  certain
     guarantees that it has issued. It also requires that a guarantor recognize,
     at the  inception  of a  guarantee,  a liability  for the fair value of the
     obligation undertaken in issuing the guarantee. The initial recognition and
     measurement   provisions  of  this   interpretation  are  applicable  on  a
     prospective basis to guarantees issued or modified after December 31, 2002;
     while,  the  provisions of the  disclosure  requirements  are effective for
     financial statements of interim or annual periods ending after December 15,
     2002. The company  believes that the adoption of such  interpretation  will
     not  have a  material  impact  on its  financial  position  or  results  of
     operations and will adopt such  interpretation  during fiscal year 2003, as
     required.

     In January  2003,  the FASB issued FIN No. 46,  "Consolidation  of Variable
     Interest  Entities",  an interpretation of Accounting Research Bulletin No.
     51. FIN No. 46 requires that variable  interest entities be consolidated by
     a company if that company is subject to a majority of the risk of loss from
     the  variable  interest  entity's  activities  or is  entitled to receive a
     majority of the entity's residual returns or both. FIN No. 46 also requires
     disclosures  about  variable  interest  entities  that  companies  are  not
     required to consolidate  but in which a company has a significant  variable
     interest.  The  consolidation   requirements  of  FIN  No.  46  will  apply
     immediately to variable  interest  entities created after January 31, 2003.
     The consolidation  requirements will apply to entities established prior to
     January 31, 2003 in the first fiscal year or interim period beginning after
     June 15, 2003.  The  disclosure  requirements  will apply in all  financial
     statements  issued after January 31, 2003.  The company will begin to adopt
     the provisions of FIN No. 46 during the first quarter of fiscal 2003.

STOCK-BASED COMPENSATION

     The Company accounts for stock-based awards to employees in accordance with
     Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
     Employees" and related  interpretations and has adopted the disclosure-only
     alternative of SFAS No. 123, "Accounting for Stock-Based Compensation."

     Options  granted  to  consultants,  independent  representatives  and other
     non-employees  are  accounted for using the fair value method as prescribed
     by SFAS No. 123.

YEAR END

     The Company has adopted December 31 as its fiscal year end.

NOTE 2 - GOING CONCERN

The  accompanying  financial  statements  have been  prepared  assuming that the
Company will continue as a going concern,  which contemplates the recoverability
of assets and the  satisfaction of liabilities in the normal course of business.
As noted above, the Company is in the development  stage and,  accordingly,  has
not yet  generated a proven  history of  operations.  Since its  inception,  the
Company has been engaged  substantially  in financing  activities and developing
its product line,  incurring  substantial costs and expenses.  As a result,  the
Company incurred accumulated net losses through the year ended December 31, 2002
of $2,271,080. In addition, the Company's development activities since inception
have been financially sustained by capital contributions.

The ability of the Company to continue as a going concern is dependent  upon its
ability  to  raise  additional  capital  from  the  sale of  common  stock  and,
ultimately,  the achievement of significant  operating results. The accompanying
financial  statements  do not  include  any  adjustments  that might be required
should the  Company be unable to recover  the value of its assets or satisfy its
liabilities.

NOTE 3 - INCOME TAXES

The Company  accounts for income taxes under  Statement of Financial  Accounting
Standards  No.  109,  "Accounting  for Income  Taxes"  ("SFAS No.  109"),  which
requires use of the  liability  method.  SFAS No. 109 provides that deferred tax
assets and  liabilities  are recorded based on the  differences  between the tax
bases of  assets  and  liabilities  and their  carrying  amounts  for  financial
reporting purposes,  referred to as temporary  differences.  Deferred tax assets
and  liabilities  at the end of each period are  determined  using the currently
enacted tax rates applied to taxable income in the periods in which the deferred
tax assets and liabilities are expected to be settled or realized.

The provision for income taxes differs from the amount  computed by applying the
statutory  federal income tax rate to income before  provision for income taxes.
The sources and tax effects of the differences are as follows:

          U.S federal statutory rate      (34.0%)

          Valuation reserve                 34.0%
                                         -------

               Total                          --%
                                         =======

As of December 31, 2002,  the Company has a net operating  loss carry forward of
approximately $2,271,080. The related deferred asset has been fully reserved.

                                       23
<PAGE>
                        ECLIPSE ENTERTAINMENT GROUP, INC.
                   Notes to Consolidated Financial Statements

NOTE 4 - RELATED PARTY TRANSACTION

As of December 31, the president and shareholder had charged his personal credit
card for the Company's operating expenses totaling $61,952.

NOTE 5 - NOTEHOLDER PREFERRED SHARE EXCHANGE AGREEMENT

In  December  2002,  the  noteholders   forgave  the  Company's  debts  totaling
$3,649,942  in exchange  for  preferred  shares of Eclipse  Releasing,  Inc.,  a
wholly-owned subsidiary.

NOTE 6 - CONSULTING AGREEMENT

In  August  2002,  the  Company  entered  into a  consulting  agreement  with an
individual  to assist it in strategic  corporate  planning and  identifying  new
business  opportunities  in  consideration  of 1,500,000 shares of the Company's
common  stock  totaling  $67,500  based on the fair market value of the services
rendered.  The Company incurred consulting expense of $50,625 for the year ended
December 31, 2002. The stated shares were issued in January 2003.

NOTE 7 - GAIN ON FORGIVENESS OF DEBT

In 2002, the holder of a loan in the amount of $65,966 forgave the debt in full.

In December 2002, noteholders forgave the Company's debts totaling $3,649,943 in
exchange of preferred shares of its subsidiary.

NOTE 8 - STOCKHOLDER'S EQUITY

COMMON STOCK

The Company has  authorized  50,000,000  shares of $0.001 par value common stock
and 10,000,000 shares of $0.001 par value preferred stock.

In 2002, the Company issued 837,500 shares of common stock for the settlement of
interest and default penalties on notes payable.

In June 2002, the Company issued a total of 3,545,000  shares of common stock to
various  individuals  for the  consulting,  legal  and  administrative  services
rendered during the year.

                                       24
<PAGE>
(b)  Exhibit           Description
     -------           -----------

     3.1               Articles of Incorporation.*

     3.2               Bylaws.*

     10.1              Contract between Eclipse Entertainment Group, Inc.,
                       Ancient Warrior Films, LLC, and Franco Columbu**

     10.2              Consulting agreement with Globestar***

     10.3              Contract between Eclipse, Eclipse Releasing and the
                       Noteholders dated December 30th, 2002

     21                Subsidiaries of Registrant

     99.1/99.2         Certification(s) of Art Birzneck

*    Incorporated by reference. (filed with Company's Form 10-SB/A filed on June
     27th, 2000.)
**   Incorporated by reference. (filed with Company's Form 10-KSB filed on April
     15th, 2002)
***  Incorporated  by  reference.  (filed with  Company's  Form 10-QSB  filed on
     December 19, 2002)

                                       25
<PAGE>
                                   SIGNATURES

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

ECLIPSE ENTERTAINMENT GROUP, INC.

/s/ Art Birzneck
----------------------------------------
BY: ART BIRZNECK. PRESIDENT/CFO/DIRECTOR
DATE: APRIL 15TH, 2003

                                       26