UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549


                                   FORM 10-KSB

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

                   For the fiscal year ended December 31, 2004

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

               For the transition period from ________ to ________

                        Commission file number: 005-79752


                             AGU Entertainment Corp.
      ---------------------------------------------------------------------
                 (Name of small business issuer in its charter)

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

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

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

Securities registered under Section 12(g) of the Exchange Act:
                     Common Stock, par value $0.00 per share
            --------------------------------------------------------
                                (Title of class)

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the 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 is 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. [ ]

The Company's revenues for the year ended December 31, 2004 were $956,930

The  number of shares of the  registrant's  common  stock,  par value  $0.00 per
share, outstanding as of February 28, 2005 was 24,220,361.

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


<PAGE>


                           FORWARD-LOOKING INFORMATION

         Cautionary Statement Pursuant to Safe Harbor Provisions of the
                Private Securities Litigation Reform Act of 1995

   This report may include a number of "forward-looking statements" as that term
is defined in Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. These statements reflect
management's   current  views  with  respect  to  future  events  and  financial
performance and include  statements  regarding  management's  intent,  belief or
current  expectations,  which are based upon assumptions about future conditions
that may prove to be  inaccurate.  Prospective  investors are cautioned that any
such  forward-looking  statements  are not  guarantees  of  future  performance,
involve risk and uncertainties,  and that as a result, actual results may differ
materially from those  contemplated  by such  forward-looking  statements.  Such
risks include, among other things, the volatile and competitive markets in which
we operate, our limited operating history, our limited financial resources,  our
ability to manage our growth and the lack of an  established  trading market for
our securities. When considering  forward-looking statements,  readers are urged
to carefully review and consider the various disclosures, including risk factors
and their  cautionary  statements,  made by us in this  report  and in our other
reports filed with the Securities and Exchange Commission.

PART I.

Item 1. DESCRIPTION OF THE BUSINESS

History and Background

   We were  formerly  known as  Lexington  Barron  Technologies,  Inc.  and were
incorporated  in the State of  Colorado  on August 23,  2000 for the  purpose of
addressing the specific needs of small  businesses and startup  organizations by
providing a broad range of consulting and advisory services, ranging from market
research  and  analysis to business  plan and systems  development  to financial
consulting.  In early 2004, our former management determined that their business
model was not  progressing  and that we should  either  merge with or acquire an
operating company with an operating history and assets.

   Effective April 1, 2004, we completed a Share Exchange Agreement with Pyramid
Music  Corp.,  a  Florida  corporation  ("PMC").  Under  the  terms of the Share
Exchange  Agreement,  we acquired 100% of the outstanding common stock of PMC in
exchange  for  16,922,464  shares of our common  stock.  On March 26,  2004,  in
anticipation of the completion of the share exchange, we changed our name to AGU
Entertainment Corp. Upon completion of this transaction, the former shareholders
of PMC owned,  on a fully diluted basis,  approximately  80% of the  outstanding
common  stock of AGU  Entertainment  Corp.  as of April 1, 2004,  resulting in a
change in control.  The  transaction  was accounted for as a reverse  merger and
recapitalization  whereby PMC,  which became a wholly  owned  subsidiary  of AGU
Entertainment  Corp. ("we or "the  Company"),  was deemed to be the acquirer for
accounting purposes.  In addition, we had no identifiable assets and liabilities
as of April 1, 2004. As a result,  PMC is deemed to be the surviving  accounting
and reporting entity, and all of the historical financial  information presented
in this  Form  10-KSB,  including  the  consolidated  financial  statements  and
Management's  Discussion  of  Financial  Condition  and  Results of  Operations,
reflect the assets, liabilities, results of operations and cash flows of PMC and
its  subsidiaries,  The Tube Music Network,  Inc., a Florida  corporation  ("The
Tube") and Pyramid Records International, inc., a Florida corporation ("PRI").

   In July of 2004,  we  dissolved  PMC, and as a result The Tube and PRI became
direct wholly-owned  subsidiaries of AGU Entertainment Corp. On October 20, 2004
the Company's  shareholders  approved the  reincorporation of the Company in the
state of Delaware through a merger of the Company into a wholly owned subsidiary
corporation  incorporated in the State of Delaware. The reincorporation resulted
in the Company becoming a Delaware corporation  effective as of October 21, 2004
and did not result in any change in the Company's name, headquarters,  business,


                                       2
<PAGE>

jobs, management, location of any of the Company's offices or facilities, number
of employees, taxes payable to the State of Colorado, assets, liabilities or net
worth. In February of 2005, we formed two new subsidiaries,  AGU Studios,  Inc.,
("AGU Studios") a Florida  corporation,  and 3200 Oakland Park , Inc., a Florida
corporation.  In March of 2005,  we changed  the name of PRI to AGU Music,  Inc.
("AGU Music").

   Our  corporate  headquarters  is located  at 3200 West  Oakland  Park  Blvd.,
Lauderdale Lakes, FL 33311 and our telephone number is (954) 714-8100.

Description of Business

   Since the inception of our current business  operations and through the third
quarter  of  2004,  we  were a  development  stage  company.  We  had  commenced
significant operations by the end of 2004 and by the end of 2005 we expect to be
operating and generating revenues in three main lines of business:  (1) The Tube
Music Network ("The Tube"), (2) AGU Music and (3) AGU Studios as a comprehensive
media center. The Tube will broadcast traditional music videos and live concerts
of  contemporary  music  material that is derived from archived  video and music
collection  libraries.  AGU Music is a record company  engaged in the release of
recorded music materials acquired through artist signings and acquisitions.  Our
business plan contemplates that the AGU Studios,  when completely  developed and
fully  operational,  will be a comprehensive  media center that will offer film,
television  and  music  production   facilities,   including  sound  stages  for
recording,  and executive  offices for our  operations  and other  entertainment
industry  organizations.  The property will be managed  through our wholly owned
subsidiary, 3200 Oakland Park, Inc.

   The   Tube  -  Our   business   plan   calls   for  The   Tube   to   deliver
free-to-the-consumer  advertiser  supported music video programming 24 hours per
day, seven days a week. We anticipate  penetration into approximately 22 million
digital  cable  homes by the end of 2005.  The Tube  will be the only  all-music
network on television  and will not air any game shows,  awards  shows,  reality
shows or news shows. In addition to revenue generated from national advertising,
it is intended  that The Tube will also have a local  component  offering  radio
tie-ins, local marketing,  promotions and local advertising. See "Risk Factors -
Our  failure  to  develop  advertising   revenues  could  adversely  impact  our
business." In addition,  our business plan also  contemplates that The Tube will
feature a direct e-commerce  component that will enable the audience to purchase
the music they see and hear  immediately  by telephone or via the internet.  All
facets of The Tube, from programming, to advertising, to marketing and promotion
will remain true to its pure music  vision,  which is to deliver  pure music and
entertainment content to an audience that we believe craves quality music.

   The Tube is designed to appeal to the  economically  powerful 36 and over age
group.  In a departure  from the way music has  traditionally  been presented on
television,  the goal of The Tube is to invigorate music enthusiasts with a bold
fusion of music that crosses  multiple  formats and spans every decade since the
introduction  of The Beatles.  We intend to draw from music video  archives from
classic  video  artists such as U2, Duran Duran and the  Eurythmics  and feature
them  alongside new tracks by heritage  artists and rare concert clips from acts
such as The Eagles,  Aerosmith,  Sting, Eric Clapton and The Rolling Stones. See
"Risk Factors - We may not be able to purchase  and/or  license  assets that are
critical to our business."

   Les Garland, who co-founded music television stations,  MTV, VH1 and The Box,
serves as president  of The Tube.  Mr.  Garland  oversees  programming  content,
distribution, branding, marketing, promotions, public relations and advertising,
and also serves as our senior executive vice president and director.

   We anticipate that The Tube will be the first music network to be distributed
using  the  digital,  over-the-air  signal  of  broadcast  television  stations.
Broadcasters'  digital  signals have ample bandwidth to transmit their station's
primary  signal,  along with The Tube and CD quality  audio.  Our business  plan
assumes that The Tube will achieve its  national  distribution  targets in three
steps: 1) create a lucrative revenue  opportunity for broadcasters who carry The
Tube, 2) negotiate distribution  agreements with major broadcast groups that own
stations  in  multiple  markets,  and  3)  facilitate  "retransmission  consent"
agreements  between  broadcast  groups  and  cable  multiple  systems  operators
("MSO's"), which will provide carriage of The Tube as a digital channel on these
cable systems.


                                       3
<PAGE>

   We expect to launch The Tube  nationally  in the  second  half of 2005 with a
national media campaign utilizing marketing,  promotions and public relations to
reach every relevant audience for the network.  The campaign will be designed to
heighten  awareness of the network,  stimulate  demand for it across the country
and  cultivate  its image as the only network that  delivers  quality  music and
entertainment content. There can be no assurances that we will be able to launch
the Tube or reach the distribution targets anticipated in our business plan. See
"Risk Factors - We may be unable to implement our business and growth  strategy"
and "We  intend  to launch  new  products  in a  volatile  market  and we may be
unsuccessful."

   AGU Music - AGU Music executes the marketing,  promotion and  distribution of
high quality  music  recordings  through  distribution  agreements  with ARK 21,
Records,  L.P.,  an  affiliate of  Universal  Music Group and  SonyBMG,  via its
affiliate  Sanctuary Music. We pursue a mixture of marquee and classic recording
artists with a history of success as well as fresh innovative talent.

   We do not target the youth pop music  market,  which is generally  associated
with large marketing budgets and significant  financial risk. AGU Music projects
are  targeted  to reach the 25-54  year old  demographic,  which we  believe  is
associated with a greater amount of consumer  spending than any other segment of
the  population.  We intend to  integrate  AGU Music  with The Tube to provide a
unique marketing advantage for our record label by directly selling music to the
consumer  through  The Tube and also  making  music  available  to the  consumer
through  traditional  retail channels via AGU Music's  distribution  system.  In
2004,  we  released  three  projects  which  comprise  the  majority of our 2004
revenues:

o  Chaka Khan - In October  2004, we completed a new recording by Chaka Khan who
   performs a collection of music standards such as "Stormy  Weather",  The Best
   Is Yet To Come" and "To Sir with  Love." The project  was  recorded  with the
   London  Philharmonic  Orchestra  and has an  impressive  list of studio music
   veterans  participating.  The release is  distributed  through  SonyBMG via a
   sub-distribution  deal with Sanctuary Urban  ("Sanctuary").  The release will
   also include a DVD, and we are currently in  negotiations  with Sanctuary for
   an International licensing arrangement outside the U.S.
o  Lalah  Hathaway  - Lalah  Hathaway  is the  daughter  of music  legend  Donny
   Hathaway,  and this record,  entitled  "Outrun the Sky", was released through
   Universal  Distribution  late in the third quarter of 2004,  and includes the
   recording single "Forever, For Always, For Love", which reached number one on
   the Urban R&B charts by Billboard Magazine during the first quarter of 2005.
o  Bridge to Havana - A collection of over 100 of America's finest musicians and
   songwriters,  including Gladys Knight,  Bonnie Raitt, Joan Osborne, Dave Koz,
   Peter Frampton, Mick Fleetwood, and Montel Jordon, who journeyed to Havana to
   produce a record  album with their Cuban  counterparts.  This  recording  was
   released  through  Universal in June of 2004 and went to #3 on the  Billboard
   World Music list.

   AGU  Studios - We plan to develop a  comprehensive  media  center at the real
property  purchased in December  2004 (see Item 2.  Description  of  Properties)
whose  business  model is to lease  space and offer film,  television  and music
production  facilities,  including  sound stages for  recording,  and  executive
offices for AGU's  operations and other  entertainment  industry  organizations.
Upon  completion  of  the  development  project,  for  which  we  have  received
enthusiastic  feedback  from the local  government,  we expect the  facility  to
consist of approximately 75,000 square feet of office space available for lease,
six sound stages ranging in size from 1,800 square feet to 28,000 square feet, a
12,000 square foot audio production studio, a 7,000 square foot commissary and a
two and a half acre back lot for film production.

   We  anticipate  that within the next three  years the rental  income from the
office space and production facilities will be sufficient to cover substantially
all of the  operating  expenses  of the  studio,  which will allow us to use the
soundstages  and  production  studios  for new music and film  projects  without
requiring significant cash outlays. To date, we have not entered into any leases
or any other material contractual  commitments with respect to the usage of this
facility. There can be no assurances that we will be able to reach our projected
rental income levels.  See "Risk Factors - Our business revenue generation model
is unproven and could fail." A limited  amount of  production  activity did take
place in 2004 and in February 2005 we formed a separate subsidiary, AGU Studios,
Inc.,  under which our studio  development  and production  activities will take
place.

Trademarks


                                       4
<PAGE>

   We have six applications  pending with the United States Patent and Trademark
Office,  including applications for The Tube and Think of it as Music Television
only with Music.

Competition

   The Tube,  AGU Music and AGU Studios  operate in  industries  that are highly
competitive,  with many national and international  firms competing in the areas
served  by us.  Many of these  competitor  firms are well  established  in these
markets and many have greater  financial  resources and managerial  capabilities
than us. We expect to encounter  substantial  competition in our efforts to grow
our business.

Employees

   As of December 31, 2004 we had 29 full time employees.

Available Information

   We currently do not have any of our SEC filings available on our website,  as
it is currently under construction.  Our website address will be www.aguent.com.
The  information on our website will not be and should not be considered part of
this  document and is not  incorporated  into this  document by  reference.  The
website is only intended to be an active textual reference. By June 30, 2005, we
expect to make available free of charge through the Investor  Relations  section
of our  website  our Annual  Report on Form  10-KSB,  Quarterly  Reports on Form
10-QSB,  Current  Reports on Form 8-K, and any amendments to those reports filed
or furnished  pursuant to Section 13(a) or 15(d) of the Securities  Exchange Act
of 1934.  This  information  is currently  available  through the website of the
Securities  and Exchange  Commission,  www.sec.gov,  and can also be obtained by
directly contacting the Company's principal office.


                                  Risk Factors
The following is a summary of the principal risks  associated with the ownership
of our common stock. You should consider carefully these risk factors,  together
with all of the other information in this report.

Risks Inherent to this Company:

Because of losses incurred by us to date and our general financial condition, we
received a going concern qualification in the audit report from our auditors for
the most recent fiscal year that raises  substantial  doubt about our ability to
continue to operate as a going concern.

We had a net loss of  approximately  $5.9  million  for the  fiscal  year  ended
December 31, 2004 and a working capital deficiency of approximately $7.7 million
as of December 31, 2004. These matters raise substantial doubt about our ability
to continue as a going  concern.  Our existence is dependent  upon  management's
ability to develop profitable  operations and resolve our liquidity problems. We
anticipate  that we will attain  profitable  status and  improve  our  liquidity
through the continued  development  of our  television  network,  recorded music
business and the Lauderdale Property.  If we are not able to continue as a going
concern, we may cease to operate and our investors may lose some or all of their
investment.

We have a  limited  operating  history  and we  anticipate  that  we  will  have
operating losses in the foreseeable future.

As a company that has recently  emerged from the  development  stage, we have no
existing income and a very limited  operating history from which to evaluate our
business  prospects.  We cannot assure you that we will ever achieve  profitable
operations or generate significant revenues. Our future operating results depend
on many factors,  including  demand for our products,  the level of competition,
and the ability of our officers to manage our  business and growth.  As a result
of our limited  operating history and the emerging nature of the market in which
we will compete,  we anticipate  that we will have  operating  losses until such
time as we can develop a substantial and stable revenue base.


                                       5
<PAGE>

We will need  additional  capital  which may not be  available  on  commercially
acceptable terms, if at all.

We have very limited  financial  resources.  The Company currently has a monthly
cash requirement of approximately  $550,000 and we will need to raise additional
capital  in the  second  quarter  for  working  capital,  capital  expenditures,
business  expansion,  repayment  of  maturing  debt and to  continue  as a going
concern. We anticipate that we will need to raise up to approximately $5 million
over the  balance  of 2005 to provide  for these  requirements.  Our  failure to
obtain  additional  capital to finance our working  capital  needs on acceptable
terms will negatively impact our business, financial condition and liquidity. In
addition, we have $7.6 million of principal debt that will become due at various
dates during 2005, including a $250,000 principal payment due on June 25, 2005.
We currently do not have the  resources to satisfy  these  obligations,  and our
inability  to do so could have a material  adverse  effect on our  business  and
ability to continue as a going concern.  If we are unable to repay our debt when
due, we may be forced to refinance the debt on terms less  favorable to us, seek
protection  under the federal  bankruptcy  laws or be forced into an involuntary
bankruptcy filing.

If we  continue  to  experience  liquidity  issues  and are  unable to  generate
revenue,  we may be unable to repay our outstanding debt when due, including the
secured convertible term note and promissory note, each of which is secured by a
mortgage on the Lauderdale Property,  and may be forced to seek protection under
the federal bankruptcy laws.

We have  experienced  liquidity  issues since our  inception due to, among other
reasons,  our limited ability,  to date, to raise adequate capital on acceptable
terms. We have  historically  relied upon the issuance of promissory  notes that
are  convertible  into  shares of our common  stock to fund our  operations  and
currently  anticipate that we will need to continue to issue promissory notes to
fund our operations and repay our outstanding  debt for the foreseeable  future.
At December 31, 2004, we had approximately  $12 million of debt outstanding.  If
we are unable to issue  additional  promissory  notes or secure  other  forms of
financing,  we will have to evaluate alternative actions to reduce our operating
expenses and conserve cash. We have already  cancelled plans for one significant
music project due to a lack of available working capital.

Moreover, as a result of our liquidity issues, we have experienced delays in the
repayment of promissory  notes upon maturity.  Certain holders of our promissory
notes agreed in 2004 to convert their promissory notes into shares of our common
stock. In addition, we have not made the required monthly principal and interest
payments  since June of 2004 on the notes  totaling  $331,000 that we assumed in
connection  with  acquiring  rights under a music  distribution  agreement.  Our
failure to make the required monthly principal and interest payments constitutes
an event of default under the terms of the notes.  Under the terms of the notes,
if an event of  default  occurs,  the  holders  of the  notes  are  entitled  to
accelerate  the  maturity  of the  notes and  demand  immediate  payment  of all
outstanding  principal due on the notes. To date, the holders of such notes have
not taken  action to  accelerate  the debt.  We have been  negotiating  with the
holders to amend the payment terms of the notes,  which would include waivers of
default  for the  required  payment  that  have not been  made.  There can be no
assurance  that  we  will be  successful  in  resolving  this  matter  or that a
resolution  will be on terms that are favorable to us. An event of default under
these notes could  accelerate  the debt  repayment  provisions  under other debt
instruments  or agreements  due to cross default  provisions  contained in those
documents.  If in the  future,  the  holders  of  our  promissory  notes  demand
repayment of principal  and accrued  interest  instead of electing to convert to
common stock and we are unable to repay our debt when due or resolve issues with
existing note holders,  we may be forced to refinance  these notes on terms less
favorable  to us than the  existing  notes,  seek  protection  under the federal
bankruptcy laws or be forced into an involuntary bankruptcy filing.

In addition,  the $7,000,000  promissory note issued to Charley  Zeches,  in her
capacity  as  trustee  of Lakes  Holding  Trust U/A and the  $3,000,000  secured
convertible term note issued to Mitchell  Entertainment Company are each secured
by a mortgage on the  Lauderdale  Property.  If either of these holders  demands
repayment of the debt in accordance with their  respective  payment terms and we
are  unable to  repay,  these  debt  holders  may  foreclose  on the  Lauderdale
Property.  See "Risk Factors - If AGU Studios is unable to generate revenue,  we
may be unable to repay the  outstanding  debt that is secured by the  Lauderdale
Property and the debt holders may foreclose."

Our business revenue generation model is unproven and could fail.

Our revenue model is new and evolving,  and we cannot be certain that it will be
successful.  The potential  profitability of this business model is unproven and
there can be no assurance that we can achieve profitable operations. Our ability
to generate revenues  depends,  among other things, on our ability to launch our


                                       6
<PAGE>

television network,  sign recording artists  and develop and lease space within
our property in Lauderdale  Lakes,  Florida.  Accordingly,  we cannot assure you
that our  business  model  will be  successful  or that we can  sustain  revenue
growth, or achieve or sustain profitability.

If AGU  Studios  is unable to  generate  revenue,  we may be unable to repay the
outstanding debt that is secured by the Lauderdale Property and the debt holders
may foreclose.

On December 22, 2005, we purchased a 162,000  square foot  building  situated on
approximately 23 acres of land in Lauderdale Lakes, Florida, which comprises our
sole principal property. In addition to serving as our headquarters,  we plan to
develop the Lauderdale  Property into a comprehensive media center, AGU Studios.
Our business plan  contemplates  that we will lease film,  television  and music
production   facilities,   and   office   space   for   entertainment   industry
organizations,  but to date,  we have not  entered  into any leases or any other
material  contractual  commitments  with  respect to the usage of the  property.
Currently, the property is not generating significant revenue. See "Risk Factors
- Our business revenue generation model is unproven and could fail."

The $7,000,000 promissory note that we issued to Charley Zeches, in her capacity
as trustee of Lakes Holding Trust U/A is secured by a first lien mortgage on the
Lauderdale  Property,  and the $3,000,000 secured  convertible term note that we
issued to Mitchell Entertainment Company is secured by a second lien mortgage on
the  Lauderdale  Property.  See  "Description  of Property."  We currently  have
obligations  to make  payments  under  these  notes,  but we are not  generating
significant revenues from the Lauderdale Property.  If we are unable to generate
significant  revenue from the Lauderdale  Property,  and are unable to repay the
outstanding debt that is secured by the property, the debt holders may foreclose
on the property.

Our success is dependent upon our senior management team and our ability to hire
and retain qualified employees.

We believe that our success is substantially  dependent upon: (1) our ability to
retain and motivate our senior management team and other key employees;  and (2)
our  ability to  identify,  attract,  hire,  train,  retain and  motivate  other
qualified personnel. The development of our business and operations is dependent
upon  the  efforts  and  talents  of our  executive  officers,  whose  extensive
experience and contacts  within the industries in which we wish to compete are a
critical component of our business  strategy.  We cannot assure you that we will
be  successful  in  retaining  the  services of any of the members of our senior
management  team or other  key  personnel,  or in  hiring  qualified  technical,
managerial,  marketing and administrative personnel. We do not have "key person"
life insurance policies on any of our key personnel, so in the event of a tragic
incident during the development phase of the Company, we would find ourselves in
a very precarious  position without the financial ability or management skill to
overcome it. If we do not succeed in retaining  our  employees and in attracting
new employees, our business could suffer significantly.

We may be unable to implement our business and growth strategy.

Our growth  strategy  and ability to generate  revenues and profits is dependent
upon our ability to: (1) develop and  provide new  services  and  products;  (2)
establish and maintain sales and distribution channels,  including the launch of
our television network; (3) develop new business opportunities; (4) maintain our
existing  clients  and  develop the  organization  and systems to support  these
clients; (5) establish financial and management systems; (6) attract, retain and
hire highly skilled management and consultants; (7) obtain adequate financing on
acceptable terms to fund our growth strategy;  (8) develop and expand our client
and customer  bases;  (9)  negotiate  agreements on terms that will permit us to
generate adequate profit margins; and develop and lease the Lauderdale Property.
Our failure with respect to any or all of these factors could impair our ability
to  successfully  implement  our growth  strategy,  which  could have a material
adverse effect on our results of operations and financial condition.

We may not be able to adequately manage future growth.

If we are successful in developing our business  plan,  the  anticipated  future
growth of the  business  could  place a  significant  strain on our  managerial,
operational and financial resources.  We cannot assure you that management would


                                       7
<PAGE>

effectively manage  significant growth in our business.  If we are successful in
executing our business  plan and achieve our  anticipated  growth,  such success
will  place  significant   demands  on  our  management,   as  well  as  on  our
administrative, operational and financial resources. For us to manage our growth
and satisfy the greater financial,  disclosure and internal control requirements
that arise with exiting the development stage and becoming fully operational, we
must:
   o  upgrade our operational,  financial, accounting and management information
      systems,  which would  include the  purchase of new  accounting  and human
      resources software;
   o  identify  and  hire  an  adequate  number  of  operating,  accounting  and
      administrative personnel and other qualified employees;
   o  manage new employees and integrate them into our culture;
   o  incorporate effectively the components of any businesses or assets that we
      may acquire in our effort to achieve or support growth;
   o  closely  monitor  the  actions  of  our  music  company  distributors  and
      broadcast   entities  which  air  The  Tube  and  manage  the  contractual
      relationships we have with them; and
   o  develop and improve  financial  and  disclosure  processes  to satisfy the
      reporting  requirements of the Securities and Exchange  Commission and the
      National Association of Securities Dealers, Inc., including Section 404 of
      the Sarbanes-Oxley Act of 2002.

The failure to adequately  manage any growth would adversely affect our business
operations and financial results.

We  intend  to  launch  new  products  in  a  volatile  market  and  we  may  be
unsuccessful.

We intend to launch new products,  which include a television  network featuring
classic  rock  music  and  video  focused  on  the  36  and  over  market,   the
international  distribution  of CDs and  DVDs and  film,  music  and  television
production services.  The consumer retail market and the television industry are
volatile  marketplaces  and we may  not be able to  successfully  penetrate  and
develop  either  sector.  We  cannot  assure  you  that we will be able to find,
purchase  and  maintain the airwave  space  necessary to carry and  successfully
launch a new television network. Even if we are able to find such airwave space,
we will be successful  only if consumers  establish a loyalty to our network and
purchase  the  products  advertised  on the network,  including  those  products
offered  by  our  subsidiary,   AGU  Music,   Inc.   (formerly  Pyramid  Records
International,  Inc.).  We will have no control  over  consumer  reaction to our
network or product offerings.  If we are not successful in building a strong and
loyal consumer  following,  we may not be able to generate  sufficient  sales to
achieve profitability.

We do not have the ability to control the volatility of sales.

Our  business  is  dependent  on selling  our  products  in a volatile  consumer
oriented  marketplace.  The retail  consumer  industry,  by its nature,  is very
volatile and  sensitive to numerous  economic  factors,  including  competition,
market conditions, and general economic conditions. None of these conditions are
within  our  control.  There can be no  assurance  that we will  have  stable or
growing  sales of our  record  company  products  and  advertising  space on our
television  network,  and  maintain   profitability  in  the  volatile  consumer
marketplace.

Our music business is subject to digital piracy,  and this risk grows more acute
as new technologies develop.

In our music business,  technological  developments  have created new risks with
respect  to our  ability to  protect  our  intellectual  property.  Advances  in
technology  that enable the transfer and downloading of digital music files from
the  Internet  without  authorization  from the owners of rights to such content
have  threatened the  conventional  copyright-based  business model by making it
easier to create and redistribute  unauthorized  music files.  Such unauthorized
distribution  may adversely affect sales of our recorded music and our operating
results.  As a result, we may need to incur expenses to develop new services for
the authorized digital  distribution of music and to combat unauthorized digital
distribution of our intellectual  property.  These initiatives,  if we choose to
undertake  them,  would result in increased  expenses and may not achieve  their
intended result.


                                       8
<PAGE>

We may not be able to purchase  and/or  license  assets that are critical to our
business.

We  intend to  purchase  and/or  license  archived  video  and music  collection
libraries  to fulfill the  programming  needs of The Tube.  The  acquisition  or
licensure of these assets is critical to  accomplishing  our business  plan.  We
cannot assure you that we will be  successful in obtaining  these assets or that
if we do acquire them,  that we will be able to do so at a reasonable  cost. Our
failure to purchase  and/or license these  libraries at a reasonable  cost would
have a  material  adverse  effect on our  business,  results of  operations  and
financial condition.

We may not be able to maintain our client relationships that we have developed.

AGU Music's and AGU Studios'  clients are, and will be,  comprised  primarily of
artists and celebrities.  This clientele is fragmented and requires a great deal
of servicing to maintain  strong  relationships.  Our ability to maintain client
loyalty will be dependent upon our ability to successfully market and distribute
their products,  as well as our ability to service their production needs in our
studio.  We  cannot  assure  you  that  we  will be  successful  in  maintaining
relationships  with our artists.  Our inability to maintain these  relationships
could have a material adverse effect on our business,  results of operations and
financial condition.

Our failure to develop advertising revenues could adversely impact our business.

Our business plan contemplates  generating a significant  portion of our revenue
from our television network, The Tube, through sales of advertising time. We may
not be able to obtain long-term commitments from advertisers due to the start-up
nature of our business.  Advertisers  generally  may cancel,  reduce or postpone
orders  without  penalty.  Cancellations,  reductions  or delays in purchases of
advertising  could occur as a result of a strike, or a general economic downturn
in one or more industries or in one or more  geographic  areas. If we are unable
to  generate  significant  revenue  from  advertising,  it will have a  material
adverse effect on our business, financial condition and results of operations.

We may  encounter  intense  competition  from  substantially  larger  and better
financed companies.

Our success  will depend upon our ability to penetrate  the consumer  market for
media  oriented  products  and  establish a television  network with  sufficient
ratings to cover the costs  associated  with operating the network and provide a
return to our investors.  Our television network and record company will compete
with  more  established  entities  with  greater  financial  resources,   longer
operating  histories and more  recognition in the market place than we do. It is
also  possible that  previously  unidentified  competitors  may enter the market
place and decrease our chance of  acquiring  the  requisite  market  share.  Our
future  success will depend upon our ability to penetrate the market quickly and
efficiently.  Our ability to respond to  competitive  product  offerings and the
evolving  demands of the  marketplace  will play a key role in our success.  Our
failure to develop,  maintain and continually  improve our distribution  process
could prevent us from  attaining  sufficient  market share.  If we are unable to
respond and compete in these markets,  it will have a material adverse effect on
our business, results of operations and financial condition.

We may be unable to adequately react to market changes.

Our success is  partially  dependent  upon our ability to develop our market and
change  our  business  model as may be  necessary  to react to  changing  market
conditions.  Our ability to modify or change our business model to fit the needs
of a changing market place is critical to our success, and an inability to do so
could have a material  adverse  effect on our business,  liquidity and financial
condition.

If we fail to maintain an effective system of internal  controls,  we may not be
able to detect fraud or report our  financial  results  accurately,  which could
harm our business and we could be subject to regulatory scrutiny.

Pursuant to Section 404 of the  Sarbanes-Oxley  Act of 2002 ("Section  404"), we
will be required, beginning in our fiscal year 2006, to perform an evaluation of


                                       9
<PAGE>

the  Company's   internal  controls  over  financial   reporting  and  have  our
independent  registered  public accounting firm test and evaluate the design and
operating  effectiveness  of such internal  controls and publicly attest to such
evaluation.  We are in the process of preparing  an internal  plan of action for
compliance  with the  requirements of Section 404, which includes a timeline and
scheduled  activities,  although  as of the date of this  filing we have not yet
completed our effectiveness evaluation. As a result, we cannot guarantee that we
will not have any material  weaknesses  reported by our  independent  registered
public  accounting  firm.  Compliance  with the  requirements  of Section 404 is
expected  to be  expensive  and  time-consuming.  If we  fail to  complete  this
evaluation  in  a  timely  manner,  or  if  our  independent  registered  public
accounting firm cannot timely attest to our  evaluation,  we could be subject to
regulatory scrutiny and a loss of public confidence in our internal controls. In
addition,  any  failure to  implement  required  new or  improved  controls,  or
difficulties  encountered  in their  implementation,  could  harm our  operating
results, cause us to fail to meet our reporting obligations, and cause potential
stockholders  and clients to lose confidence in our financial  reporting,  which
could harm our business and the value of our common stock.

Copyright laws may negatively affect the value of certain of our assets.

Under existing United States  copyright law, sound  recordings may be protected.
United  States  copyright  law,  however,  also  gives  individual  authors  the
inalienable  right to  recapture  the rights to their  copyrighted  material  by
terminating  any  transfer of  interest in their  copyright.  For  example,  for
transfers  given on or after  January 1, 1978,  the  author  may  terminate  the
transfer  after 35 years,  or  perhaps  earlier  if the  performer  has  shorter
reversion provisions within their agreements. A more complex timeline applies to
termination of transfers  conveyed on or before December 31, 1977.  Strict rules
of notice  (i.e.,  a notice of intent to terminate  given from the author to the
publisher)  must be  followed by the author to validate  the  termination.  As a
result,  certain of our assets may be lost if challenged  by authors  seeking to
recapture their copyrighted material,  thereby potentially  negatively affecting
the results of operations and financial  condition of the Company and its future
prospects.

If the  dispute  in  which  we  are  involved  develops  into  more  substantial
litigation,  and we are  unsuccessful in the  litigation,  we may not be able to
continue operations.

On  January  27,  2005,  we were  served  with a summons  with  notice by Jarred
Weisfeld  and Cherry  Jones,  individually  and doing  business as  JarredCherry
Productions LLC, referred to herein as the plaintiffs,  which indicates that the
plaintiffs  commenced an action against us. The plaintiffs  allege,  among other
things,  breach of contract,  breach of implied  covenant of good faith and fair
dealing,  unfair  competition,   tortious   misappropriation  of  goodwill,  and
deceptive  acts and  practices  pursuant to Section 349 of the New York  General
Business Law. The plaintiffs are seeking compensatory and punitive damages of no
less than $1,812,500. We expressly deny any allegation of wrongdoing on our part
and intend to vigorously defend ourselves in this dispute, which to date has not
been presented in a formal complaint.  The outcome of this dispute is uncertain.
If this dispute  develops  into more  substantial  litigation,  it could be time
consuming and costly to defend,  and divert the attention of our management.  If
we were to lose the litigation  and the damages  sought are awarded  against us,
this outcome would have a material  adverse effect on our operations,  which, in
turn,  would likely reduce the value of an investment in our  securities.  See "
Legal Proceedings" for further discussion of the dispute.

There are potential  conflicts of interests and agreements  that are not subject
to arm's length negotiations.

Since our inception,  several of our stockholders have provided bridge financing
for start-up  costs and working  capital.  During the fiscal year ended December
31,  2004,  $283,000 of these  bridge loans was repaid from the proceeds of debt
offerings   and  $114,400   remains   outstanding   as  of  December  31,  2004.
Additionally,  several of our stockholders are affiliated with entities that may
receive brokerage fees,  consulting fees and other  compensation  related to the
performance  of  services  for us.  We are also  responsible  for a  payment  of
approximately  $331,000 on behalf of Pyramid  Media Group,  Inc., of which Allen
Jacobi,  former  president  of  our  AGU  Music  subsidiary,  is  an  owner  and
shareholder.  See "Certain  Relationships and Related  Transactions" for further
discussion of these transactions.


                                       10
<PAGE>

                  Risks Related to Investment in Our Securities

Our common  stock has never  traded on any  market,  and we cannot  predict  the
extent to which a trading market will develop.

There is  currently  no  established  trading  market for our common  stock.  An
investment in us should be regarded as illiquid and highly  speculative,  and is
suitable  only  for  persons  who  are  able  to  hold  their  investment  in us
indefinitely.  A market maker filed an information statement pursuant to Section
15c2-11 of the Exchange Act with the National Association of Securities Dealers,
Inc., ("NASD"), in order to obtain approval for quotation of our common stock on
the Over-The-Counter  Bulletin Board. To date, we have assisted the market maker
in responding to comments raised by the staff of the NASD;  however, we have not
received  the NASD's  approval.  There can be no assurance as to whether or when
approval   will  be  provided   for  our  common  stock  to  be  quoted  on  the
Over-The-Counter  Bulletin Board. Since our common stock has never traded on any
public market, we cannot predict the extent to which an active public market for
our common stock will develop or be sustained.

The issuance of shares of common stock upon the  conversion  of our  convertible
securities  and exercise of the  outstanding  warrants may cause  immediate  and
substantial dilution to our existing stockholders.

As of December  31,  2004,  we had  outstanding  warrants to purchase  2,862,236
shares  of  our  common  stock,  and  promissory  notes  and  other  convertible
securities  convertible  into 5,635,000 shares of our common stock. The issuance
of shares of common stock upon the  exercise of warrants  and/or  conversion  of
convertible  debt may result in  substantial  dilution to the interests of other
stockholders  since the holders of such  convertible  securities  may ultimately
sell the full amount issuable upon any exercises or conversions.

Existing  stockholders may suffer substantial  dilution with future issuances of
our common stock.

We  anticipate  issuing a  substantial  amount of common  stock  within the next
several  years,  either  in  connection  with  our  equity  incentive  plan  for
directors,  officers,  key  employees and  consultants,  or in private or public
offerings  to meet our  working  capital  requirements.  Any  grants or sales of
additional  shares  of our  common  stock  will  have a  dilutive  effect on the
existing  stockholders,  which  could  adversely  affect the value of our common
stock. In addition, we have in excess of $11 million of outstanding indebtedness
that is  convertible  into shares of our common  stock at the sole option of the
holder,  as well as  2,682,236  warrants to purchase  our common stock that were
outstanding as of December 31, 2004. A portion of this  indebtedness and certain
of these warrants offer substantial anti-dilution protections to the holders.

Our  management,  through its  significant  ownership of our common  stock,  has
ultimate control over our operations.

Our management owns a significant portion of the total outstanding shares of our
common stock.  These  officers and  employees  have been and will continue to be
able  to  significantly   influence  all  matters  requiring   approval  by  our
stockholders, including the election of directors and the approval of mergers or
other business combination transactions.

We have never paid dividends and do not anticipate paying any in the foreseeable
future.

We have never  declared or paid a cash dividend and we do not expect to have any
cash with which to pay cash dividends in the foreseeable  future.  If we do have
available cash, we intend to use it to grow our business.

Our  incorporation  documents  and  Delaware  law may  inhibit a  takeover  that
stockholders  consider  favorable  and could also limit the market price of your
shares of common  stock,  which may  inhibit an attempt by our  stockholders  to
change our direction or management.


                                       11
<PAGE>

Delaware law and our certificate of incorporation  contain provisions that could
delay or prevent a change in control of our  company.  Some of these  provisions
include the following:

      (a)   authorize   our  board  of  directors   to  determine   the  rights,
            preferences,  privileges  and  restrictions  granted  to, or imposed
            upon,  the  preferred   stock  and  to  fix  the  number  of  shares
            constituting  any series and the  designation of such series without
            further action by our stockholders; and

      (b)   prohibit cumulative voting in the election of directors, which would
            otherwise  allow  less  than a  majority  of  stockholders  to elect
            director candidates.

These  and  other  provisions  in our  certificate  of  incorporation  and under
Delaware law could reduce the price that  investors  might be willing to pay for
shares of our common  stock in the future and result in the market  price  being
lower than it would be without these provisions.

We adopted provisions in our certificate of incorporation limiting the liability
of management to stockholders.

We have adopted provisions,  and will maintain provisions, to our certificate of
incorporation  that  limit the  liability  of our  directors,  and  provide  for
indemnification  by us of our  directors  and  officers  to the  fullest  extent
permitted by Delaware law. Our  certificate  of  incorporation  and Delaware law
provide  that  directors  have no personal  liability to  corporations  or their
stockholders  for monetary  damages for actions taken as a director,  except for
breach  of duty  of  loyalty,  acts or  omissions  not in good  faith  involving
intentional  misconduct  or  knowing  violation  of  law,  unlawful  payment  of
dividends or unlawful stock repurchases, or transactions from which the director
derived  improper  personal  benefit.  Such provisions  limit the  stockholders'
ability to hold  directors  liable for breaches of fiduciary duty and reduce the
likelihood of derivative litigation against directors and officers.

We will be  subject  to the penny  stock  rules in the event  our  common  stock
becomes  eligible for trading.  These rules may adversely  affect trading in our
common stock.

We expect that our common stock will be a "low-priced" security under the "penny
stock" rules promulgated under the Securities  Exchange Act of 1934, as amended.
In accordance with these rules, broker-dealers  participating in transactions in
low-priced  securities  must  first  deliver  a risk  disclosure  document  that
describes the risks associated with such stocks, the  broker-dealer's  duties in
selling the stock,  the  customer's  rights and remedies and certain  market and
other  information.  Furthermore,  the  broker-dealer  must  make a  suitability
determination  approving the customer for low-priced stock transactions based on
the  customer's  financial  situation,  investment  experience  and  objectives.
Broker-dealers must also disclose these restrictions in writing to the customer,
obtain specific  written consent from the customer,  and provide monthly account
statements  to the  customer.  The effect of these  restrictions  will  probably
decrease the willingness of broker-dealers to make a market in our common stock,
decrease liquidity of our common stock and increase  transaction costs for sales
and  purchases  of our  common  stock  as  compared  to  other  securities.  Our
management is aware of the abuses that have occurred  historically  in the penny
stock  market.  Although  we do not  expect to be in a position  to dictate  the
behavior  of the market or of  broker-dealers  who  participate  in the  market,
management  will strive within the confines of practical  limitations to prevent
abuses normally  associated with "low-priced"  securities from being established
with respect to our securities.


Item 2. DESCRIPTION OF PROPERTIES

   On December 22, 2004 we purchased a 162,000 square foot building  situated on
approximately  23 acres of land in Lauderdale  Lakes,  Florida ("the  Lauderdale
Property"),  which comprises our sole principal property. In addition to serving
as the  Company's  corporate  headquarters,  we plan to develop  the  Lauderdale
Property  into  a  comprehensive   media  center  which  will  offer  production
facilities,   including   sound  stages  for   recording   and   executive   and
administrative offices for other entertainment industry organizations.


                                       12
<PAGE>

   In  connection  with the  purchase of the  property,  we issued a  $7,000,000
promissory  note to the seller,  Charley  Zeches,  in her capacity as trustee of
Lakes  Holding  Trust U/A,  which is secured  by a  mortgage  on the  Lauderdale
Property  (including all of our rights,  and title and interest as lessor in and
to all leases or rental  arrangements  of the  property).  The  promissory  note
accrues interest at an annual rate of 6.5% and matures on December 20, 2005. The
promissory  note is convertible at the holder's option into shares of our common
stock at a conversion price of $2.50 per share.

   In addition, we issued a $3,000,000 secured convertible term note to Mitchell
Entertainment  Company,  which is  secured  by a  second  lien  mortgage  on the
Lauderdale  Property.  The secured convertible terms note accrues interest at an
annual rate of 10% and matures on December  19,  2006.  The secured  convertible
term note is convertible at the holder's  option into shares of our common stock
at a conversion price of $1.50 per share.

   We are currently working with architects and consultants to create a plan for
developing the property into a comprehensive media center. The plan will include
renovations  and  alterations,  which  will  allow  for the most  efficient  and
economic  construction of state of the art studio facilities.  While these plans
are currently in the early stages, there is no definitive  construction estimate
of the costs for the renovations,  or a specific time frame for completing them.
Management  believes the building is adequately  insured.  The building is being
depreciated on a straight line basis over 30 years.

   Upon completion of the development  project we expect the facility to consist
of  approximately  75,000 square feet of office space  available for lease,  six
sound  stages  ranging in size from 1,800  square feet to 28,000  square feet, a
12,000 square foot audio production studio, a 7,000 square foot commissary and a
two and a half acre back lot. To date,  we have not  entered  into any leases or
any material contractual commitments with respect to the usage of the Lauderdale
Property.  In accordance  with the terms and  conditions of the agreement  under
which we purchased the property,  the Company also has a right of first offer to
purchase  certain  real  property  located  directly  adjacent  to the  existing
property.

Item 3. LEGAL PROCEEDINGS

   On  January  27,  2005,  we were  served  with a  summons  with  notice  (the
"Summons") by Jarred Weisfeld and Cherry Jones,  individually and doing business
as  JarredCherry  Productions LLC (the  "Plaintiffs"),  which indicates that the
Plaintiffs commenced an action against the Company. The Plaintiffs allege, among
other things,  breach of contract,  breach of implied covenant of good faith and
fair dealing,  unfair competition,  tortuous  misappropriation of goodwill,  and
deceptive  acts and  practices  pursuant to Section 349 of the New York  General
Business  Law.  This  dispute  stems  from  an  alleged  agreement  between  the
Plaintiffs  and the Company  related to the works of the late Mr. Russell Jones,
who was the son of Ms. Jones and the management client of Mr. Weisfeld. Although
the  Plaintiffs,  though the  Summons,  are seeking  compensatory  and  punitive
damages  of no less  than  $1,812,500,  the  Plaintiffs  did not filed an actual
Complaint to state their  actual legal case against us. We served on  Plaintiffs
and filed a Demand for  Complaint in the  jurisdiction  in which the Summons was
filed by the  Plaintiffs.  The  Plaintiffs  were  required to respond  within 20
calendar  days as measured  from  February 23, 2005,  to avoid having the action
dismissed.  The Plaintiffs did not respond within the required 20 calendar days,
and therefore we are unable to determine the extent of their complaint. Although
we have expressly  denied any allegation of wrongdoing on our part and intend to
vigorously defend ourselves in this dispute,  we are currently unable to predict
the outcome of this action and any financial exposure to the Company, if any.

   October 13, 2004, The Tube received  notification  from a television  channel
featuring  music  related  programming  that the circle logo used by The Tube is
"confusingly  similar"  to the  circle  logo  used by that  television  channel,
supporting claims of trademark infringement and unfair competition.  On November
3, 2004, we responded to the October 13,  letter  stating that we do not believe
the  logos  are  confusingly  similar  or that any  trademark  infringement  has
occurred.  We have not received a response to our  November 3, 2004  letter.  We
intend to vigorously defend any challenge to our use of our logo.


                                       13
<PAGE>

   The Company is subject to claims and legal actions that arise in the ordinary
course of its business.  The Company  believes that the ultimate  liability,  if
any,  with respect to these claims and legal  actions,  will not have a material
effect on the financial position or results of operations of the Company.

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

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

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

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

                          Total Vote for     Total Vote Withheld
                          Each Director       From Each Director
                          --------------     -------------------

Les Garland                24,242,876                 0
John W. Poling             11,685,966                 0
Michael Jay Solomon        15,685,966                 0
Gregory R. Catinella       11,685,966                 0
David C. Levy              11,685,966                 0


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

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

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

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

   The reincorporation  resulted in the Company becoming a Delaware corporation,
effective  as of  October  21,  2004 and did not  result  in any  change  in the
Company's name, headquarters, business, jobs, management, location of any of the
Company's offices or facilities, number of employees, taxes payable to the State
of Colorado, assets, liabilities or net worth.

PART II.

Item 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
        MATTERS

   There is currently no public  trading  market for our common stock.  A market
maker  filed  an  information  statement  pursuant  to  Section  15c2-11  of the
Securities  Exchange Act of 1934,  as amended,  with the NASD in order to obtain


                                       14
<PAGE>

approval for  quotation  of our common stock on the Over the Counter  Electronic
Bulletin  Board.  To date,  we have  assisted the market maker in  responding to
comments  raised by the staff of the NASD,  however we have not received  NASD's
approval.  No assurance  can be given that our  application  will be approved or
that there will ever be a public trading market for our common stock.

   As of  February  28,  2005,  there  were  24,220,361  shares of common  stock
outstanding held by approximately  135 stockholders of record.  This number does
not include beneficial owners of common stock whose shares are held in the names
of various dealers, clearing agencies, banks, brokers and other fiduciaries.

   We have never paid a dividend on our common stock and anticipate that we will
retain  future  earnings,  if any,  to fund the  development  and  growth of our
business. Consequently, we do not anticipate paying cash dividends on our common
stock in the foreseeable future. In addition,  we are restricted under the terms
of our  convertible  notes  and  debentures  from  paying  dividends  or  making
distributions and repurchasing,  redeeming or otherwise  acquiring any shares of
common stock except under certain circumstances.

   As a Delaware  corporation,  we may not declare and pay  dividends on capital
stock  if the  amount  paid  exceeds  an  amount  equal  to the  surplus,  which
represents the excess of our net assets over  paid-in-capital or, if there is no
surplus,  our net profits for the current and/or  immediately  preceding  fiscal
year. To the extent we pay dividends and we are deemed insolvent or inadequately
capitalized, a bankruptcy court could direct the return of any dividends.

Issuances of Unregistered Securities

   During 2004,  we issued  195,958  shares of common stock to  consultants  and
contractors in exchange for $329,866 of services  performed and issued 2,311,640
shares  of common  stock to  officers  and  employees.  Also in 2004,  we issued
337,500  shares  of  common  stock in  connection  with the  acquisition  of the
Lauderdale  Property,  500,000  shares of common  stock in  connection  with the
issuance of a secured  convertible  promissory note,  1,173,540 shares of common
stock in connection with the conversion of debt and accrued  interest and 15,000
shares of common  stock to two  accredited  investors in exchange for $60,000 in
cash.

   On March 15, 2004, we entered into a share  exchange  agreement  with Pyramid
Music  Corp.,  a Florida  corporation.  Under  the  terms of the share  exchange
agreement, Lexington Barron Technologies,  Inc. acquired 100% of the outstanding
common stock of Pyramid Music Corp. in exchange for 16,922,464  shares of common
stock of Lexington Barron Technologies,  Inc. As a result of the share exchange,
which was consummated on April 1, 2004, the former shareholders of Pyramid Music
Corp. owned, on a fully diluted basis,  approximately 80% of the then-issued and
outstanding  shares of common stock of Lexington Barron  Technologies,  Inc. and
the former  principal  owners of Lexington  Barron  Technologies,  Inc.'s common
stock (who are former directors of the company) owned, on a fully diluted basis,
approximately 20% of the then-issued and outstanding  shares of Lexington Barron
Technologies, Inc.

   On  September  15,  2004,  we  issued a  $500,000  convertible  note  that is
convertible  into common  stock at a  conversion  price of $1.00 per share,  and
common stock purchase warrants to purchase 500,000 shares of our common stock at
an exercise price of $1.00 per share.

   On December  22,  2004,  we entered  into a  securities  purchase  agreement,
effective as of December 20, 2004, with Mitchell  Entertainment Company pursuant
to which we issued to Mitchell  Entertainment Company a secured convertible term
note in the aggregate  principal amount of $3,000,000.  The secured  convertible
term note bears interest at 10% per annum, payable monthly commencing on January
1, 2005. The maturity date of the secured  convertible term note is December 19,
2006, subject to Mitchell  Entertainment  Company's right to extend the maturity
if  we  do  not  satisfy  certain  financial  covenants,  or  call  the  secured
convertible term note upon our failure to satisfy certain  financial  conditions
or the  cessation  of the active  participation  in our  business of certain key
persons.

   Pursuant to the  securities  purchase  agreement,  we also issued to Mitchell
Entertainment  Company  a  common  stock  purchase  warrant  to  purchase  up to
2,000,000  shares of our common stock at an initial  exercise price of $2.00 per


                                       15
<PAGE>

share.  The common stock purchase  warrant is  exercisable  through the close of
business on the later of December 31, 2009 or the  maturity  date of the secured
convertible  term note. The terms of the common stock purchase  warrant  provide
that if the Securities and Exchange  Commission  does not declare a registration
statement  effective  within 180 days after  December  20,  2004,  the number of
shares that the holder of the common stock purchase  warrant will be entitled to
receive upon exercise will be increased by 20,000 shares for each 30-day period.
The common stock purchase warrant provides for  anti-dilution  protection in the
event  we  issue  additional  shares  of  our  common  stock  as a  dividend  or
distribution,  in the event we subdivide or combine our common stock,  or in the
event our  EBITDA  for the  quarter  ended  September  30,  2006 is not at least
$5,000,000.

   On December  22,  2004,  pursuant to the  agreement  for  purchase  and sale,
effective as of September 10, 2004, as amended by the amendment to the agreement
for purchase and sale,  effective as of October 25, 2004, and amendment no. 2 to
the  agreement  for  purchase  and  sale,  effective  as of  November  30,  2004
(together,  referred to as the  agreement  for purchase and sale),  with Charley
Zeches,  in her capacity as trustee of Lakes Holding Trust U/A, we purchased the
Lauderdale  Property for a purchase  price that consisted of $860,000 in cash, a
convertible  promissory  note in the principal  amount of $7,000,000 and 312,500
shares of our common stock.  In addition,  we issued 25,000 shares of our common
stock to AUW, Inc.,  which  assisted in the  transaction.  The  promissory  note
accrues  interest  at an annual  rate of 6.5%,  payable  monthly  commencing  on
January 1, 2005 and matures on December 20,  2005.  Pursuant to the terms of the
promissory  note,  on the closing  date we  deposited  into an escrow  account a
prepayment  of  interest  and  estimated  real  estates  taxes in the  amount of
$150,000.  Additional  quarterly  prepayments of $145,000 are required to be put
into escrow  beginning  March 22, 2005. The promissory note also requires that a
principal  payment in the amount of $250,000 be paid on June 25, 2005. If we are
delinquent in any payments  required under the promissory  note, we must pay, in
addition to any  interest or other sums  payable  under the  promissory  note, a
service  charge equal to 5% of the amount  received by Charley Zeches 10 days or
more after its due date.  Upon the  occurrence  of any other  default  under the
promissory  note or under any of the  related  loan  documents,  we must pay, on
demand,  interest on all sums  outstanding at 18% per annum. In the event of the
continuation of any default in the payment of any interest, principal or escrows
under the  promissory  note for a period of 10 days after  due,  or in the event
Charley Zeches,  in her capacity as trustee,  deems herself insecure or upon the
occurrence of any other event of default under the  promissory  note, any of the
related loan  documents,  any other  documents  delivered in connection with the
promissory  note or any of our  other  obligations  to  Charley  Zeches,  in her
capacity  as trustee,  then  Charley  Zeches may declare the entire  outstanding
principal, interest and other charges to be immediately due and payable.

   During  October,  November  and  December  of  2004,  we  issued  convertible
promissory  notes in the  aggregate  net  principal  amount of $825,000 that are
convertible  into common stock at a conversion price of $3.00 per share. We also
issued 182,236 common stock purchase  warrants to purchase  shares of our common
stock at an  exercise  price of $3.00 per  share.  In  October  2004 we issued a
promissory  note for $225,000,  on which we repaid  $75,000 in December 2004. At
December  31,  2004,  2,682,236  warrants  to  purchase  our  common  stock were
outstanding.

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

Item 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

Overview

   We were  formerly  known as  Lexington  Barron  Technologies,  Inc.  and were
incorporated  in the State of  Colorado  on August 23,  2000 for the  purpose of
addressing the specific needs of small  businesses and startup  organizations by
providing a broad range of consulting and advisory services, ranging from market
research  and  analysis to business  plan and systems  development  to financial
consulting.  In early 2004, our former management determined that their business


                                       16
<PAGE>

model was not  progressing  and that we should  either  merge with or acquire an
operating company with an operating history and assets.

   Effective April 1, 2004, we completed a Share Exchange Agreement with Pyramid
Music  Corp.,  a  Florida  corporation  ("PMC").  Under  the  terms of the Share
Exchange  Agreement,  we acquired 100% of the outstanding common stock of PMC in
exchange  for  16,922,464  shares of our common  stock.  On March 26,  2004,  in
anticipation of the completion of the share exchange, we changed our name to AGU
Entertainment Corp. Upon completion of this transaction, the former shareholders
of PMC owned,  on a fully diluted  basis,  approximately  eighty  percent of the
outstanding  common  stock of AGU  Entertainment  Corp.  as of  April  1,  2004,
resulting in a change in control. The transaction was accounted for as a reverse
merger and recapitalization  whereby PMC, which became a wholly owned subsidiary
of AGU  Entertainment  Corp.,  is  deemed  to be  the  acquirer  for  accounting
purposes. In addition, we had no identifiable assets and liabilities as of April
1, 2004. As a result, PMC is deemed to be the surviving accounting and reporting
entity, and all of the historical financial  information  presented in this Form
10-KSB,  including the consolidated  financial  statements and this Management's
Discussion  and  Analysis of  Financial  Condition  and  Results of  Operations,
reflect the assets, liabilities, results of operations and cash flows of PMC and
its  subsidiaries,  The Tube Music Network,  Inc., a Florida  corporation  ("The
Tube") and Pyramid Records International, inc., a Florida corporation ("PRI").

   As a result of the share  exchange,  AGU became  the  parent  company of PMC,
which was a  development  stage  company with an inception  date of May 20, 2003
with two wholly-owned  operating  subsidiaries that are engaged in the following
services:  (i) the  formation and  operation of a television  network,  The Tube
Music Network,  Inc., ("The Tube") that airs  traditional  music videos and live
concerts of contemporary  music material that is derived from archived video and
music collection  libraries,  and (ii) a production,  marketing and distribution
record company,  Pyramid Records International,  Inc. ("PRI"). PMC was dissolved
in  July  of 2004  and at  that  time  The  Tube  and  PRI  became  wholly-owned
subsidiaries of AGU Entertainment Corp. In February 2005, PRI officially changed
its name to AGU Music, Inc. ("AGU Music").

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

   In the late 1990's, broadcasters throughout the country were granted portions
of the airwaves at no cost with the  understanding  that they would provide free
digital  signals as part of the U.S.  government's  desire  for high  definition
television.  However,  due to  improvements in digital signal  compression,  the
bandwidth  required to broadcast digital  television was substantially  reduced,
leaving  broadcasters  with excess  bandwidth to use at their  discretion.  As a
result, there are currently a number of media companies that have the ability to
offer  a  digital  quality  picture  over  the air  directly  to  consumers  and
indirectly through the cable and satellite  operators' digital box using surplus
bandwidth  from local  broadcasters.  These media  outlets can offer  additional
channels to broadcast local news,  sports,  weather or other specialty  services
like The  Tube.  We  expect  to gain  significant  distribution  for The Tube by
reaching  agreements  with these  service  providers  to air The Tube's  digital
signal.  We  are  currently  in  negotiations  with  several  of  these  service
providers,  and expect to  eventually  leverage  this  market  penetration  into
households served by larger cable and satellite systems. We expect that The Tube
will earn revenues through advertising sales and through e-commerce with respect
to music and related  products  that will be seen by consumers on The Tube.  See
"Risk Factors - Our revenue generation model is unproven and could fail."

   AGU Music will produce both studio albums and DVD  concerts.  It entered into
several  agreements for  distribution and released three albums to the public in
2004.  Our  ability to  produce  new  albums  and DVD  concerts  in 2005 will be
dependent on the amount of working  capital  available to us (see  Liquidity and
Capital Resources) for the required  marketing,  promotional and other operating
expenses necessary to produce recorded music projects. We have already cancelled
plans for one  significant  music  project  due to a lack of  available  working
capital.

   In the third quarter of 2004, our board of directors  decided to purchase and
develop a  facility  that would  serve as a  comprehensive  media  entertainment
recording and  production  facility that would  encompass  film,  television and


                                       17
<PAGE>

musical  projects.  On December 22, 2004, we closed on the purchase of a 162,000
square foot facility situated on 23 acres of land in Lauderdale  Lakes,  Florida
(the  "Lauderdale  Property").  Our business plan envisions a facility that will
consist of approximately 75,000 square feet of office space available for lease,
six sound stages ranging in size from 1,800 square feet to 28,000 square feet, a
12,000 square foot audio production studio, a 7,000 square foot commissary and a
two and a half acre back lot for film projects. We believe that this will be one
of the largest studio production  facilities on the east coast and that there is
substantial demand within the entertainment industry for a facility of this type
in South Florida.

   We anticipate that within three years the rental income from the office space
and production  facilities will be sufficient to cover  substantially all of the
operating expenses of the studio, which will allow us to use the soundstages and
production  studio to  develop  new music and film  projects  without  requiring
significant  cash  outlays.  To date, we have not entered into any leases or any
other  material  contractual  commitments  with  respect  to the  usage  of this
facility.  The Company  expects to generate  revenue by offering  technical  and
production services in the areas of film,  television and music production,  and
through the rental of office and studio space.  There can be no assurances  that
we will be able to reach our projected rental income levels. See "Risk Factors -
Our revenue  generation  model is unproven and could fail." A limited  amount of
production  activity did take place on the  Lauderdale  Property in 2004, and in
February  2005 we formed a separate  subsidiary,  AGU  Studios,  Inc., a Florida
Corporation,  under which our studio development and production  activities will
take place.

Liquidity and Capital Resources

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

   As a company that has recently emerged from the start-up phase with a limited
operating  history,  we are subject to all the substantial risks inherent in the
development  of a  new  business  enterprise  within  an  extremely  competitive
industry.  We cannot  assure  you that the  business  will  continue  as a going
concern  or ever  achieve  profitability.  Due to the  absence  of an  operating
history and the emerging nature of the market in which we compete, we anticipate
operating losses until such time as we can  successfully  implement our business
strategy,  which includes the national launch of The Tube and the development of
the Lauderdale  Property.  For the year ended December 31, 2004, we had revenues
of $956,930 and incurred a net loss of $5.9 million. Our financial condition and
operating results,  specifically a working capital deficit of approximately $7.7
million, an accumulated deficit of approximately $6.7 million, and net cash used
in  operations  of  approximately  $5.0 million for the year ended  December 31,
2004,  raise  substantial  doubt  about our  ability to continue to operate as a
going  concern.  Because  of  losses  incurred  by us to date  and  our  general
financial condition,  our independent registered public accounting firm inserted
a going concern  qualification  in their audit report for the most recent fiscal
year that  raises  substantial  doubt  about our  ability to continue as a going
concern.  See "Risk  Factors - Because of losses  incurred by us to date and our
general financial  condition,  we received a going concern  qualification in the
audit  report  from our  auditors  for the most  recent  fiscal year that raises
substantial concern about our ability to continue as a going concern."

   Since May 20, 2003, we have financed our operations through numerous debt and
equity  issuances.  In addition to the  convertible  notes  discussed  below, we
issued   approximately   $4,429,000   of   convertible   notes  or   debentures,
approximately  $3,379,000  of which plus  accrued  interest,  were  subsequently
converted  into  1,173,540  shares of common stock of the Company and $75,000 of
which was repaid in 2004.  Approximately  $825,000 of the remaining  convertible
promissory notes mature in the fourth quarter of 2006 and a $150,000  promissory
note matures on June 30, 2005.  While these notes are convertible into shares of
our  common  stock at a  conversion  price of $3.00 per  share,  there can be no
assurances  that these notes will be converted  prior to their  becoming due. We
currently do not have the financial  resources to repay these  promissory  notes
without completing an additional financing.

   As part of the purchase  price of the Lauderdale  Property,  we issued to the
seller on  December  22, 2004 a  convertible  promissory  note in the  principal
amount of  $7,000,000.  The note pays  interest at an annual rate of 6.5% and is


                                       18
<PAGE>

convertible  at any time at the seller's  option into shares of our common stock
at a conversion price of $2.50 per share. A principal payment of $250,000 is due
on June 25, 2005 and the  remaining  balance of the note matures on December 22,
2005.  At the closing of the  purchase  of the  Lauderdale  Property,  we made a
prepayment  into an escrow account of $150,000 for interest on the note and real
estate taxes on the  Lauderdale  Property  covering the quarterly  period ending
March 31, 2005.  Additional quarterly prepayments of $145,000 are required to be
put into escrow  beginning  March 22, 2005. All of our obligations to the seller
under the convertible  promissory  note and related  agreements are secured by a
mortgage on the  Lauderdale  Property,  including  all of our rights,  title and
interest as lessor in and to all leases or rental arrangements of the Lauderdale
Property. We did not make the escrow payment that was required on March 22, 2005
and we will attempt to negotiate an amendment to the convertible promissory note
to amend the terms of the  required  prepayments  of  interest  and real  estate
taxes. If the Holder of the convertible  promissory note does not agree to amend
the terms for the required  prepayments  of interest and real estate taxes,  the
Holder may foreclose on the property.

   Also on December 22, 2004, we issued a secured  convertible  term note in the
principal amount of $3,000,000 to Mitchell  Entertainment Company (the "Mitchell
Note").  The note pays interest at an annual rate of 10% and has a maturity date
of December 19,  2006.  The note can be converted at any time by the lender into
shares of our common  stock at an initial  conversion  price of $1.50 per share,
subject  to  anti-dilution   protections  and  certain  other  adjustments.   In
connection with the issuance of this note, we also issued to the lender warrants
to purchase  2,000,000 shares our common stock at an exercise price of $2.00 per
share. We also incurred deferred financing fees of approximately $148,000, which
includes the  reimbursement to the Lender for its costs and expenses  (including
legal fees) related to the loan  transaction  and a finder's fee of $60,000 paid
to Palmetto  Services,  Inc.,  an affiliate of the Lender.  The Mitchell note is
secured by a second mortgage on the Lauderdale Property and by substantially all
of our other assets, including the capital stock of our subsidiaries.

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

   On March 3, 2004 our AGU Music  subsidiary  entered  into an  Assignment  and
Assumption  Agreement with Pyramid Media Group,  Inc.  ("PMG") whereby AGU Music
agreed  to  assume  all of  the  covenants  and  obligations  of a  Distribution
Agreement  between PMG and ARK 21 Records,  LP  ("ARK21").  In exchange  for the
rights to the  Distribution  Agreement  and  certain  assets  of PMG,  AGU Music
assumed the obligation to repay $350,000 of notes payable to certain  principals
of PMG. The Company has  guaranteed  the payment of these  notes,  which have an
annual interest rate of 8% and mature on May 1, 2007.  Allen Jacobi,  the former
President  of AGU  Music,  is an  owner  and  controlling  shareholder  of  PMG.
Approximately  $19,000  of these  notes  was  paid in 2004  and the  outstanding
balance as of December 31, 2004 is  approximately  $331,000.  The terms of these
notes require monthly  payments of principal and interest.  We have not made the
required  monthly  principal and interest  payments  since June of 2004, and are
currently  negotiating with the holders to amend the payment terms of the notes,
which  would  include  waivers of the event of default  related to the  required
payments  that were not made.  If we are  unsuccessful  in reaching an amendment
with the note  holders to amend the terms,  the note holders will be entitled to
exercise all of the rights and remedies available to them under the terms of the
notes.  Under the terms of the notes, if an event of default occurs, the holders
of the notes are  entitled to  accelerate  the  maturity of the notes and demand
immediate  payment of all  outstanding  principal due on the notes. To date, the
holders of such notes have not taken action to accelerate  the debt. An event of
default under these notes could  accelerate the debt repayment  provisions under
other debt instruments or agreements due to cross default  provisions  contained
in those documents.  See "Risk Factors - If we continue to experience  liquidity
issues  and are  unable  to  generate  revenue,  we may be  unable  to repay our
outstanding  debt when due,  including  the  secured  convertible  term note and
promissory  note,  each of which is  secured  by a  mortgage  on the  Lauderdale
Property,  and may be forced to seek  protection  under the  federal  bankruptcy
laws."

   In June of 2004,  we  entered  into an  agreement  with  Radical  Media  Inc.
("Radical")  whereby  Radical  will design and develop  network  logos,  graphic
templates,  and on-air  interstitials for The Tube. In accordance with the terms
of the agreement,  as amended,  we are required to pay $200,000 and are required
to issue 150,000 shares of our common stock.  The remaining  $50,000 of cash has
yet to be paid as of February 28, 2005.

   The  Company  currently  has a  monthly  cash  requirement  of  approximately
$550,000 and we will need to raise additional  capital in the second quarter for
working capital, capital expenditures, business expansion, repayment of maturing
debt and to  continue as a going  concern.  We  anticipate  that we will need to
raise up to  approximately  $5 million  over the  balance of 2005 to provide for
these requirements.  See "Risk Factors - If we continue to experience  liquidity
issues  and are  unable  to  generate  revenue,  we may be  unable  to repay our


                                       19
<PAGE>

outstanding  debt when due,  including  the  secured  convertible  term note and
promissory  note,  each of which is  secured  by a  mortgage  on the  Lauderdale
property,  and may be forced to seek  protection  under the  federal  bankruptcy
laws. We cannot  assure you that we will be  successful  in  completing  such an
offering, in executing the business plan or achieving  profitability.  If we are
not successful in raising additional capital, our financial condition,  business
operations  and  ability  to  continue  as a going  concern  will  be  adversely
affected.  At December 31, 2004,  payments  required under our known contractual
obligations over the next five years are as follows:

<TABLE>
<CAPTION>
                                   2005         2006         2007     2008 and beyond       Total
                                   ----         ----         ----     ---------------       -----
<S>                             <C>          <C>           <C>             <C>          <C>
Principal on notes payable      $7,607,782   $4,337,986    $ 13,890        $ 9,793      $11,969,451
Radical agreement                   50,000            -           -              -           50,000
Operating leases                    23,731       21,306       1,186              -           46,223
Capital leases                      13,881       10,259       1,539             78           25,757
                                -------------------------------------------------------------------
Total contractual obligations   $7,695,394   $4,369,551    $ 16,615        $ 9,871      $12,091,431
                                ===================================================================
</TABLE>

   Cash used in operations for the year ended December 31, 2004 was  $5,005,897,
which was primarily the result of our net loss of $5,890,390 partially offset by
increases to accounts  payable and accrued  expenses,  non cash expenses and the
issuance of common  stock in  exchange  for  services.  We expect to continue to
generate  negative cash flows from operations until such time as we can complete
a substantial debt or equity offering and launch The Tube  nationally,  which we
currently  expect will be late in 2005.  There can be no assurances that we will
be successful in launching The Tube in this timeframe.

   Cash used in  investing  activities  for the year  ended  December  31,  2004
amounted to  $1,477,493,  and consists  primarily of $1,118,000 for the purchase
of, and capital  improvements  to, the  Lauderdale  Property and $150,000  spent
under the  agreement  with  Radical.  Capital  expenditures  in 2005 will depend
largely upon our ability to raise additional capital; however, our business plan
currently assumes approximately $1 million of capital expenditures over the next
twelve months.

   We received net cash from financing  activities  during 2004 in the amount of
$7,117,875,  which is mainly  comprised of the $7,329,000 of  convertible  notes
issued as described above.

   We have experienced liquidity issues since our inception due primarily to our
limited ability, to date, to raise adequate capital on acceptable terms. We have
historically  relied upon the issuance of promissory  notes that are convertible
into shares of our common stock to fund our operations and currently  anticipate
that we will need to continue to issue  promissory  notes to fund our operations
and repay our outstanding debt for the foreseeable future. At December 31, 2004,
we had approximately $12 million of debt outstanding.  If we are unable to issue
additional promissory notes or secure other forms of financing,  we will have to
evaluate alternative actions to reduce our operating expenses and conserve cash.

   The  Company's  financial  condition and operating  results,  specifically  a
working  capital  deficiency of  approximately  $7.7 million and an  accumulated
deficit of  approximately  $6.7 million at December  31, 2004,  as well as a net
loss  of  approximately  $5.9  million  and  net  cash  used  in  operations  of
approximately  $5.0 million in fiscal year 2004, raise  substantial  doubt about
its ability to continue  as a going  concern.  Our ability to operate as a going
concern is dependent on our ability to develop profitable operations and resolve
our liquidity problems.  There can be no assurance that we will be successful in
becoming  profitable  and more  liquid.  See "Risk  Factors - If we  continue to
experience liquidity issues and are unable to generate revenue, we may be unable
to repay our outstanding debt when due,  including the secured  convertible term
note and  promissory  note,  each of  which  is  secured  by a  mortgage  on the
Lauderdale  property,  and may be forced to seek  protection  under the  federal
bankruptcy laws.

   Moreover,  as a result of our liquidity issues, we have experienced delays in
the  repayment  of certain  promissory  notes upon  maturity.  However,  certain
holders of our  promissory  notes have agreed in 2004 to extend the due dates on
their  promissory  notes. If in the future,  the holders of our promissory notes
demand repayment of principal and accrued interest instead of electing to extend
the due date and if we are  unable  to repay our debt  when due  because  of our
liquidity  issues,  we may be  forced to  refinance  these  notes on terms  less


                                       20
<PAGE>

favorable  to us than the  existing  notes,  seek  protection  under the federal
bankruptcy laws or be forced into an involuntary bankruptcy filing.

Critical Accounting Policies and Estimates

   We have  identified  the policies  outlined below as critical to our business
operations and an understanding of our results of operations. The listing is not
intended to be a comprehensive list of all of our accounting  policies.  In many
cases,  the accounting  treatment of a particular  transaction  is  specifically
dictated by accounting  principles generally accepted in the United States, with
less  need for  management's  judgment  in their  application.  The  impact  and
associated  risks  related to these  policies  on our  business  operations  are
discussed  throughout   "Management's   Discussion  and  Analysis  of  Financial
Condition and Results of Operations" where such policies affect our reported and
expected  financial  results.  For a detailed  discussion on the  application of
these and other accounting policies, see note 1 in the Notes to the Consolidated
Financial  Statements in Item 7. Note that our  preparation  of this Form 10-KSB
requires us to make estimates and assumptions that affect the reported amount of
assets and liabilities,  disclosure of contingent  assets and liabilities at the
date of our  financial  statements,  and the  reported  amounts of  revenue  and
expenses  during the  reporting  period.  There can be no assurance  that actual
results will not differ from those estimates.

Revenue Recognition and Accounts Receivable
   With  respect to the sales of  recorded  music,  we  recognize  revenue  when
products  are  shipped  to retail  music  outlets.  Revenue is  recorded  net of
distribution  fees and an allowance for  anticipated  returns in accordance with
the terms of our  distribution  agreements and  established  industry  practice.
Other  revenues  are  recognized  as services  are  provided to the customer and
collectibility  is reasonably  assured.  AGU Music records  accounts  receivable
based on amounts due from our  distributors of recorded music in accordance with
the net revenue earned,  less  production,  marketing and  promotional  expenses
incurred by the distributors on AGU Music's behalf. At December 31, 2004, we did
not have an allowance for doubtful accounts,  based on management's  analysis of
the  collectibility  of the receivables  that were outstanding as of the balance
sheet  date.  We will  continue to monitor  collections  and  payments  from our
customers and  distributors and may be required to record an allowance in future
periods for potential credit losses.

Intangibles
   We continually  evaluate whether events and changes in circumstances  warrant
revised  estimates of useful lives or recognition  of an impairment  loss of our
intangibles,  which as of December 31, 2004,  consist  mainly of network  logos,
graphic  templates  and  on-air  interstitials   developed  for  The  Tube,  and
contractual rights under a recorded music distribution agreement. The conditions
that would trigger an impairment  assessment of our intangible  assets include a
significant,  sustained negative trend in our operating results or cash flows, a
decrease in demand for our products, a change in the competitive environment and
other industry and economic  factors.  We measure  impairment of our intangibles
utilizing the undiscounted cash flow method. If the estimated  undiscounted cash
flows do not exceed the value of the  related  intangible,  we then  compare the
carrying  amount of the asset to its fair value  based on  estimated  discounted
cash flows. If the unamortized  balance of the intangible asset exceeds its fair
value as measured by the discounted cash flows, an impairment charge is recorded
to write the value of the  intangible  asset down to its fair value.  We did not
record any impairment for  intangibles  for the years ended December 31, 2004 or
2003.

Accounting for Income Taxes
   As part of the process of preparing our consolidated financial statements, we
are required to estimate our income taxes. This process involves  estimating our
actual  current tax  exposure  together  with  assessing  temporary  differences
resulting  from differing  treatment of items for tax and  accounting  purposes.
These  differences  result in  deferred  tax assets and  liabilities,  which are
included  within  our  consolidated  balance  sheet.  We must  then  assess  the
likelihood  that our deferred tax assets will be recovered  from future  taxable
income  and to the  extent we  believe  that  recovery  is not  likely,  we must
establish  a  valuation  allowance.  To the  extent  we  establish  a  valuation
allowance or increase  this  allowance  in a period,  we must include an expense
within the tax provision in the consolidated statement of operations.

   Significant  management judgment is required in determining our provision for
income  taxes,  our  deferred  tax  assets  and  liabilities  and any  valuation
allowance  recorded  against our net  deferred  tax assets.  We have  recorded a


                                       21
<PAGE>

valuation  allowance of $2,498,064 as of December 31, 2004, due to uncertainties
related to our ability to utilize  some of our  deferred  tax assets,  primarily
consisting of certain net operating  losses  carried  forward before they expire
and certain accrued  expenses,  which are deferred for income tax purposes until
paid.  The valuation  allowance is based on our estimates of taxable  income and
the period  over which our  deferred  tax assets  will be  recoverable.  The net
deferred tax asset as of December 31, 2004 and 2003 was $0, net of the valuation
allowance.

Issuances of Common Stock

   Because of the significant liquidity issues we faced since our inception,  we
have been  required to issue common stock to third party vendors and, on certain
occasions,  to employees in order to pay for services  rendered.  Such issuances
are recorded as expense in the period in which the services  are  performed.  At
the time such services were performed there was no trading market for our common
stock and the value of our stock was not readily  determinable.  During 2004, we
issued  an  aggregate  of  195,958  shares of common  stock to  consultants  and
contractors  in exchange for services  performed.  These services were valued at
$329,866.  We also issued  2,311,640 shares of common stock to employees in 2004
and recorded  compensation expense of $55,488. The amount of expense recorded in
connection with these issuances of common stock required significant  management
judgment.  Factors  considered  by management in  determining  these  valuations
included management's assessment as to the value of the services performed,  the
conversion  prices under which debt was  converted  into our common stock during
2004, the contractual  terms under which we issued shares in partial payment for
the  acquisition of certain assets in 2004 and the  restrictions  on the sale of
the shares issued.

Results of Operations for the Year Ended December 31, 2004

   Revenues  were  $957,000  during the period.  Approximately  $891,000 of this
amount  was  related  to  recorded  music  shipments  by AGU Music in the fourth
quarter of 2004. AGU Music generated gross profit of $799,000 during the period.
AGU Studios had revenues of $50,000 and gross profit of $34,000.

   Operating  expenses were $6,420,000,  which includes  marketing and promotion
expenses of $1,520,000 and $194,000 of depreciation  and  amortization  expense,
with the remainder being general and administrative  expenses.  Interest expense
was $304,000 and includes $123,000 for the reduction of debt discounts.

   We did not record a tax benefit  during this period as we determined  that it
was  more  likely  than not that we  would  not be able to  generate  sufficient
taxable  income to use any net  deferred  tax  assets.  As such,  we  recorded a
valuation allowance equal to the net deferred tax asset that existed at December
31, 2003 and increased  our  valuation  allowance so that no net tax benefit was
recorded in 2004.

   Our net loss for the period was $5,890,000.

   We  anticipate  entering  into  several  affiliate  agreements  with  digital
broadcasters,  which will allow The Tube to be seen in  approximately 22 million
homes by the end of 2005. While we expect this market  penetration to generate a
substantial increase in marketing, promotion and other expenses both at The Tube
and at AGU Studios, we also expect that our revenues will increase  sufficiently
enough to cover these increases.  Thus, our results of operations in fiscal 2004
are not  indicative  of our  projected  results of operations in fiscal 2005 and
beyond.

Recent Accounting Pronouncements

   In December 2004, the Financial  Accounting  Standards  Board ("FASB") issued
Statement  of  Financial  Accounting  Standards  No. 123,  Share-Based  Payments
(revised 2004), ("SFAS No. 123R"). This statement eliminates the option to apply
the  intrinsic  value  measurement  provisions of  Accounting  Principles  Board
("APB") Opinion No. 25, Accounting for Stock Issued to Employees, to stock based
compensation  issued to employees.  The Statement  requires companies to measure
the cost of  employee  services  received  in  exchange  for an award of  equity
instruments  based on the  fair  value of the  award at the date of  grant,  and
recognize  that cost over the period  during  which an  employee  is required to


                                       22
<PAGE>

provide services in exchange for the award. Adoption of SFAS No. 123R could have
a material effect on the Company's results of operations.


Item 7. FINANCIAL STATEMENTS

Index to Financial Statements




Independent Auditors' Report                                                  24

Balance Sheets as of December 31, 2004 and 2003                               25

Statements of Operations for the years ended December 31, 2004 and for
the period from May 20, 2003, (inception) through December 31, 2003           26

Statement of Changes in Shareholders' Equity (Deficiency) from May 20,
2003 (inception) through December 31, 2004                                    27

Statements of Cash Flows for the year ended December 31, 2004 and for
the period from May 20, 2003 (inception) through December 31, 2003            28

Notes to Consolidated Financial Statements as of December 31, 2004 and
2003                                                                          29


                                       23
<PAGE>

Report of Independent Registered Public Accounting Firm


The Board of Directors and shareholders
AGU Entertainment Corp. (formerly Lexington Barron Technologies, Inc.):


We  have  audited  the   accompanying   consolidated   balance   sheets  of  AGU
Entertainment  Corp. and Subsidiaries  (the "Company"),  as of December 31, 2004
and 2003 and the  related  consolidated  statements  of  operations,  changes in
shareholders' equity (deficiency) and cash flows for the year ended December 31,
2004 and for the period from May 20, 2003  (inception)  to  December  31,  2003.
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 audit.

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 audit to obtain reasonable assurance about whether the financial
statements are free of material misstatements. 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 financial  position of AGU  Entertainment
Corp.  and  Subsidiaries  as of December  31, 2004 and 2003,  and the results of
their  operations  and their cash flows for the year ended December 31, 2004 and
for the period from May 20, 2003 (inception) to December 31, 2003, in conformity
with accounting principles generally accepted in the United States of America.

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will  continue as a going  concern.  As discussed in Note 13 to
the consolidated financial statements,  the Company's working capital deficiency
of  approximately  $7.7  million,  accumulated  deficit  of  approximately  $6.7
million,  net loss from  operations of  approximately  $5.9 million and net cash
used in operations of approximately  $5.0 million raise  substantial doubt about
its  ability to  continue as a going  concern.  Management's  plan in regards to
these matters is also  described in Note 13. These  financial  statements do not
include any adjustments that might result from the outcome of this uncertainty.

/s/ Weinberg & Company

Weinberg & Company, P.A.


Boca Raton, Florida
March 18, 2005


                                       24
<PAGE>


                             AGU ENTERTAINMENT CORP.
                 (Formerly Lexington Barron Technologies, Inc.)
                           Consolidated Balance Sheets
                        As of December 31, 2004 and 2003

<TABLE>
<CAPTION>
<S>                                                                <C>             <C>
                                                                        2004            2003
                                                                   ------------    ------------
Assets
Current Assets:
    Cash                                                           $    771,533    $    137,048
    Accounts receivable                                                 507,482          40,671
    Prepaid expenses                                                    225,037              --
                                                                   ------------    ------------
      Total current assets                                          $ 1,504,052    $    177,719


    Property and equipment, net of accumulated
      depreciation of $123,260 and $16,497                            9,110,373         126,041
    Intangibles  , net of accumulated amortization                      913,735              --
    Other assets                                                        164,737           4,385
                                                                   ------------    ------------
      Total assets                                                 $ 11,692,897    $    308,145
                                                                   ============    ============

Liabilities and Shareholders' Equity (Deficiency)
Current Liabilities:
    Accounts payable                                               $    501,514    $    163,246
    Accounts payable - related parties                                  169,258              --
    Notes payable, related parties - current portion                    445,642         114,400
    Convertible notes payable                                         7,150,000         600,000
    Equipment note - current portion                                     12,140          11,350
    Capital leases payable - current portion                             13,881           8,934
    Accrued expenses                                                    910,418         158,464
    Other current liabilities                                            36,965              --
                                                                   ------------    ------------
      Total current liabilities                                       9,239,818       1,056,394

Capital leases payable - long term portion                               11,876          13,810
Equipment note - long term portion                                       36,668          48,808
Convertible notes payable - net of unamortized
      discounts (note 4)                                                854,178              --
                                                                   ------------    ------------
Total liabilities                                                    10,142,540       1,119,012
                                                                   ------------    ------------

Shareholders' Equity (Deficiency) (Note 8):
    Preferred stock, no par value; 10,000,000 shares authorized,
      -0- shares issued and outstanding                                      --              --
    Common stock, no par value; 100,000,000 shares authorized,
      23,392,576 and 14,628,324 shares issued and outstanding         4,658,380             400
    Additional paid-in capital                                        3,593,634              --
    Accumulated deficit                                              (6,701,657)       (811,267)
                                                                   ------------    ------------
      Total shareholders' equity (deficiency)                         1,550,357        (810,867)
                                                                   ------------    ------------

      Total liabilities and shareholders' equity (deficiency)      $ 11,692,897    $    308,145
                                                                   ============    ============
</TABLE>


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


                                       25
<PAGE>

                             AGU ENTERTAINMENT CORP.
                 (Formerly Lexington Barron Technologies, Inc.)
                      Consolidated Statements of Operations
          For the Year Ended December 31, 2004 and for the period from
               May 20,2003 (inception) through December 31, 2003

<TABLE>
<CAPTION>
                                                                   May 20, 2003
                                                                   Inception to
                                                                   December 31,
                                                       2004             2003
                                                   ------------    ------------
<S>                                                <C>             <C>
Net revenues                                       $    956,930    $     93,209
Cost of sales and services performed                    123,628              --
                                                   ------------    ------------
    Gross profit                                        833,302          93,209
                                                   ------------    ------------

Operating Expenses
    Promotion and advertising                         1,519,663          30,302
    Depreciation and amortization                       194,063          16,497
    Other general and administrative costs            4,706,213         853,714
                                                   ------------    ------------

          Total operating expenses                    6,419,939         900,513
                                                   ------------    ------------

          Operating loss                             (5,586,637)       (807,304)
    Interest expense                                    303,753           3,963
                                                   ------------    ------------
          Loss before income taxes                   (5,890,390)       (811,267)

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

          Net loss                                 $ (5,890,390)   $   (811,267)
                                                   ============    ============

Basic and diluted loss per share                   $      (0.29)   $      (0.09)
                                                   ============    ============

Weighted average common shares outstanding -
    Basic and diluted                                20,180,951       9,017,460
                                                   ============    ============
</TABLE>


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


                                       26
<PAGE>

                             AGU ENTERTAINMENT CORP.
                 (Formerly Lexington Barron Technologies, Inc.)
     Consolidated Statement of Changes in Shareholders' Equity (Deficiency)
     For the period from May 20, 2003 (inception) through December 31, 2004

<TABLE>
<CAPTION>
                                                                                                         Additional
                                                                                                           Paid-In      Accumulated
                                                               Shares         Amount        Capital        Deficit         Total
                                                            -----------    -----------    -----------    -----------    -----------
<S>                                                         <C>           <C>            <C>            <C>            <C>
Issuance of shares of common stock
    in exchange for cash on May 20, 2003                     14,628,324    $       400    $        --    $        --    $       400
Net loss                                                                                                    (811,267)      (811,267)
                                                            -----------    -----------    -----------    -----------    -----------
Balance at December 31, 2003                                 14,628,324            400             --       (811,267)      (810,867)
Issuance of shares of common stock
    to employees, March 22, 2004                              2,294,140         28,677             --             --         28,677
Recapitalization as a result of merger with
    Lexington Barron Technologies, Inc. on April 1, 2004      4,230,614             --             --             --             --
Debt and accrued interest converted into
    common stock, April 18, 2004                                203,482        610,445             --             --        610,445
Debt and accrued interest converted into
    common stock, June 30, 2004                                  39,231        130,257             --             --        130,257
Issuance of shares of common stock, Warrants and a
    convertible note with a beneficial conversion
    feature in a private placement transaction on
    September 14, 2004                                          500,000             --        500,000             --        500,000
Issuance of shares of common stock in exchange
    for cash on September 20, 2004                               15,000         60,000             --             --         60,000
Issuance of common stock in exchange for services
    on September 20, 2004                                       148,458        189,589             --             --        189,589
Issuance of common stock to employees on
    September 20, 2004                                           17,500         26,811             --             --         26,811
Common stock issued in connection with the acquisition
    of property plant and equipment on October 25, 2004
    and December 22, 2004                                       337,500        750,000             --             --        750,000
Debt and accrued interest converted into
    common stock, October 30, 2004                              889,827      2,669,479             --             --      2,669,479
Debt and accrued interest converted into
    common stock, November 3, 2004                               41,000         52,445             --             --         52,445
Issuance of shares of common stock for
    services, November 8, 2004                                   47,500        140,277             --             --        140,277
Issuance of warrants in connection with issuance of
    convertible debt, October, November and December, 2004           --             --         93,634             --         93,634
Beneficial conversion feature and issuance of warrants
    in connection with issuance of convertible debt,
    December 22, 2004                                                --             --      3,000,000             --      3,000,000
Net loss                                                             --             --                   (5,890,390)     (5,890,390)
                                                            -----------    -----------    -----------    -----------    -----------
Balance at December 31, 2004                                 23,392,576    $ 4,658,380    $ 3,593,634    $(6,701,657)   $ 1,550,357
                                                            ===========    ===========    ===========    ===========    ===========
</TABLE>


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


                                       27
<PAGE>

                    AGU Entertainment Corp. and Subsidiaries
                 (Formerly Lexington Barron Technologies, Inc.)
                      Consolidated Statements of Cash Flows
          For the Year Ended December 31, 2004 and for the period from
               May 20, 2003 (inception) through December 31, 2003

<TABLE>
<CAPTION>
                                                                                   May 20, 2003
                                                                                   Inception to
                                                                       2004     December 31, 2003
                                                                   -----------  -----------------
<S>                                                                <C>             <C>
Cash flows from operating activities:
     Net loss                                                      $(5,890,390)    $  (811,267)
     Adjustments to reconcile net loss to net cash
        used in operating activities:
           Depreciation and amortization                               194,063          16,497
           Common stock issued as payment for services                 385,353              --
           Amortization of discount on note payable                    122,812              --
           Decrease in accounts receivable                            (466,811)        (40,671)
           Increase in prepaid expenses                               (225,037)             --
           Increase in other assets                                    (12,293)         (4,385)
           Increase in accounts payable and accrued liabilities        849,441         321,711
           Increase in other liabilities                                36,965              --
                                                                   -----------     -----------
                       Net cash used in operating activities        (5,005,897)       (518,115)
                                                                   -----------     -----------

Cash flows from investing activities:
     Disbursements for intangibles                                    (151,035)             --
     Disbursements for property and equipment                       (1,326,458)        (56,915)
                                                                   -----------     -----------
                       Net cash used in investing activities        (1,477,493)        (56,915)
                                                                   -----------     -----------

Cash flows from financing activities:
     Payment of notes payable                                          (86,350)         (2,722)
     Proceeds from notes payable to related parties                    282,910         114,400
     Payment of deferred financing fees                               (148,059)             --
     Payment on capital leases                                         (11,622)             --
     Payment of notes payable to related parties                      (308,004)             --
     Proceeds from the sale of common stock                             60,000             400
     Proceeds from other notes payable                               7,329,000         600,000
                                                                   -----------     -----------
                       Net cash provided by financing activities     7,117,875         712,078
                                                                   -----------     -----------
                       Net increase in cash                            634,485         137,048

Cash, beginning of period                                              137,048              --
                                                                   -----------     -----------
Cash, end of period                                                $   771,533     $   137,048
                                                                   ===========     ===========
Supplemental disclosure of cash flow information:
        Cash paid for income taxes                                 $        --     $        --
                                                                   ===========     ===========
        Cash paid for interest                                     $    22,969     $     1,833
                                                                   ===========     ===========
     Non-cash financing activities:
        Equipment acquired through issuance of common stock        $   750,000     $        --
                                                                   ===========     ===========
        Conversion of liabilities to common stock                  $ 3,462,627     $        --
                                                                   ===========     ===========
        Equipment acquired through capital lease obligations       $    14,637     $    23,512
                                                                   ===========     ===========
        Property and equipment acquired through notes payable      $ 7,000,000     $    63,775
                                                                   ===========     ===========
</TABLE>


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


                                       28
<PAGE>

                    AGU ENTERTAINMENT CORP. AND SUBSIDIARIES
                  (Formerly Lexington Baron Technologies, Inc.)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        AS OF DECEMBER 31, 2004 AND 2003

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization AGU Entertainment Corp.  (formerly  Lexington Barron  Technologies,
Inc.) was  incorporated in the state of Colorado on August 23, 2000 to engage in
financial,  operational and systems  consulting to startup and small businesses.
Prior to April 1, 2004, AGU Entertainment Corp. ("AGU") was a development stage,
public  reporting  company and did not engage in any  significant  operations or
enter into any material transactions.

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

   At December 31, 2004, AGU had two wholly-owned  operating  subsidiaries  that
were engaged in the  following  services:(i)  the  formation  and operation of a
television  network,  The Tube  Music  Network,  Inc.,  ("The  Tube")  that airs
traditional  music videos and live concerts of contemporary  music material that
is  derived  from  archived  video and music  collection  libraries,  and (ii) a
production,  marketing and distribution  record company,  AGU Music,  Inc. ("AGU
Music"), formerly Pyramid Records International, Inc.

   On October 20, 2004, AGU was  reincorporated in the state of Delaware through
a merger of AGU into a wholly owned subsidiary  corporation  incorporated in the
State of  Delaware.  The  reincorporation  resulted  in AGU  becoming a Delaware
corporation effective as of October 21, 2004 and did not result in any change in
the company's name, business, assets, liabilities or net worth.

Principles of Consolidation The accompanying  consolidated  financial statements
include the accounts of AGU, and its subsidiaries (collectively, "the Company").
All significant inter-company transactions have been eliminated.

Reverse  Acquisition  Under the terms of the Share Exchange  Agreement (see note
2),  the  number of shares of AGU  common  stock  exchanged  in the  transaction
represented approximately 80% of the issued and outstanding common stock of AGU,
resulting in a change in control. As a result, the transaction was accounted for
as a  reverse  merger  and  recapitalization  whereby  PMC is  deemed  to be the
acquirer  for  accounting  purposes.  Because PMC is deemed to be the  surviving
accounting and reporting entity,  and because AGU had no identifiable  assets or
liabilities as of the date of the  transaction,  only PMC and its  subsidiaries'
historical  balances and results of operations are reflected in the accompanying
financial statements for all periods presented.

Revenue  Recognition  and  Accounts  Receivable  With  respect  to the  sales of
recorded  music,  the Company  recognizes  revenue when  products are shipped to
retail  music  outlets.  Revenue is  recorded  net of  distribution  fees and an
allowance for anticipated  returns in accordance with the terms of the Company's
distribution  agreements and established  industry practice.  Other revenues are
recognized  as services  are  provided to the  customer  and  collectibility  is
reasonably assured.  Accounts receivable  primarily  represents amounts due from
the  Company's  distributors  of recorded  music and is comprised of net revenue
earned,  less  production,  marketing and promotional  expenses  incurred by the
distributors on the Company's  behalf.  At December 31, 2004 the Company did not
have an allowance for doubtful accounts,  based on the Company's analysis of the
collectibility  of the receivables that were outstanding as of the balance sheet
date.  The Company will  continue to monitor  collections  and payments from its


                                       29
<PAGE>

                    AGU ENTERTAINMENT CORP. AND SUBSIDIARIES
                  (Formerly Lexington Baron Technologies, Inc.)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        AS OF DECEMBER 31, 2004 AND 2003

customers and  distributors and may be required to record an allowance in future
periods for potential credit losses.

Earnings  (Loss)  Per Share  Basic  earnings  or loss per share is  computed  by
dividing  net  earnings  or loss  attributable  to  common  stockholders  by the
weighted  average  number of  shares  outstanding  during  the  period.  Diluted
earnings or loss per share attributable to common stockholders further considers
the impact of dilutive common stock equivalents. Diluted loss per share is equal
to basic loss per share for all  periods  presented,  because  the effect of the
additional shares which would be issued assuming  conversion of convertible debt
and  outstanding  common stock warrants are  anti-dilutive  in each period.  The
aggregate amount of securities that could potentially dilute EPS in future years
at December 31, 2004 was 8,317,336.

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

Cash and Cash  Equivalents  The Company  considers all highly liquid  securities
with original  maturities  of three months or less,  when  acquired,  to be cash
equivalents.

Property,  Plant & Equipment  Property,  plant and  equipment is stated at cost.
Depreciation  is recorded  using the  straight-line  method  over the  estimated
useful lives of the assets.  The  depreciable  lives range from one to ten years
for  machinery  and  equipment,  ten to 25  years  for  buildings  and  building
improvements  and three to five  years for  furniture  and  fixtures.  Leasehold
improvements are depreciated over the remaining  applicable lease term, or their
estimated  useful  lives,  whichever  is  shorter.  Leasehold  improvements  are
written-off if the related leasehold is vacated. Major renewals and improvements
are capitalized,  while maintenance,  repairs and minor renewals not expected to
extend the life of an asset  beyond  its  normal  useful  life are  expensed  as
incurred. Land is not depreciated.

Impairment of  Long-Lived  Assets The Company  evaluates  the carrying  value of
long-lived  assets under the  provisions  of  Statement of Financial  Accounting
Standards  ("SFAS")  No.  144,  Accounting  for the  Impairment  or  Disposal of
Long-Lived  Assets.  SFAS No. 144 requires  impairment  losses to be recorded on
long-lived  assets used in operations  when indicators of impairment are present
and the undiscounted future cash flows estimated to be generated by those assets
are less than the assets'  carrying  amount.  If such assets are  impaired,  the
impairment  to be  recognized  is measured  by the amount by which the  carrying
amount of the assets  exceeds  their fair  value.  Assets to be  disposed of are
reported at the lower of the carrying  value or fair value,  less costs to sell.
No impairment  losses were  recognized by the Company as of December 31, 2004 or
2003.

Income Taxes The Company  accounts for income taxes under the provisions of SFAS
No. 109,  Accounting  for Income  Taxes.  SFAS No. 109 requires  recognition  of
deferred tax liabilities and assets for the expected future tax  consequences of
temporary  differences  between the financial statement carrying amounts and tax
bases of assets and  liabilities.  A valuation  allowance  is recorded  when the
Company  determines  that it is more likely  than not that the Company  will not
generate  sufficient  taxable  income to  utilize  all of its net  deferred  tax
assets.

Concentrations of credit risk The Company's  potential exposure to concentration
of credit risk is primarily through cash and cash equivalents. At certain times,
the Company has cash  balances in excess of Federal  Deposit  insurance  limits,
which  potentially  subject the Company to market and credit risks.  At December
31, 2004 the Company had an aggregate cash balance of  approximately  $1,129,782
that was not  covered  by  Federal  Deposit  insurance.  This  cash  balance  is


                                       30
<PAGE>

                    AGU ENTERTAINMENT CORP. AND SUBSIDIARIES
                  (Formerly Lexington Baron Technologies, Inc.)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        AS OF DECEMBER 31, 2004 AND 2003

maintained at a financial  institution  with favorable  credit ratings,  and the
Company  believes  no  significant  risk of loss  exists  with  respect  to this
balance.

Financial  Instruments  At December 31, 2004 and 2003, the carrying value of the
Company's  financial  instruments,  which  includes cash,  accounts  receivable,
accounts payable,  accrued expenses and notes payable,  approximates  their fair
value due to the short-term maturity of those instruments.

Stock-Based  Compensation  From the date of inception through December 31, 2004,
the Company did not grant any stock option  awards to employees  under its stock
option  plan.  Shares of  common  stock  issued to  employees  are  recorded  as
compensation  expense based on the estimated fair value of the stock at the date
of  issuance.  During the twelve  months ended  December  31, 2004,  the Company
recognized $55,488 of compensation expense for shares issued to employees.

   In December 2004, the Financial  Accounting  Standards  Board ("FASB") issued
SFAS No. 123,  Share-Based  Payments  (revised  2004),  ("SFAS No. 123R").  This
statement  eliminates  the  option  to apply  the  intrinsic  value  measurement
provisions of Accounting Principles Board ("APB") Opinion No. 25, Accounting for
Stock Issued to Employees, to stock based compensation issued to employees.  The
Statement  requires  companies to measure the cost of employee services received
in exchange  for an award of equity  instruments  based on the fair value of the
award at the date of grant, and recognize that cost over the period during which
an employee is required to provide services in exchange for the award.  Adoption
of SFAS No.  123R  could  have a  material  effect on the  Company's  results of
operations.

2. SHARE EXCHANGE AGREEMENT

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

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


3. PROPERTY AND EQUIPMENT, NET

Property, plant and equipment consists of the following at December 31, 2004 and
2003:


                                       31
<PAGE>

                    AGU ENTERTAINMENT CORP. AND SUBSIDIARIES
                  (Formerly Lexington Baron Technologies, Inc.)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        AS OF DECEMBER 31, 2004 AND 2003

                                            2004           2003
                                        -----------    -----------
   Land                                 $ 5,832,706    $        --
   Building and building improvements     3,035,116             --
   Equipment, furniture and fixtures        347,546        126,313
   Leasehold improvements                    18,265         16,225
                                        -----------    -----------
                                          9,233,633        142,538
   Less accumulated depreciation
   and
   Amortization                            (123,260)       (16,497)
                                        -----------    -----------
                                        $ 9,110,373    $   126,041
                                        ===========    ===========

   On  December  22,  2004,  the  Company  purchased  certain  real  property in
Lauderdale  Lakes,  Florida  consisting of  approximately 23 acres of land and a
162,000 square foot building (the "Lauderdale Property").  The purchase price of
the  Lauderdale  Property  consisted  of  $860,000  in cash  paid at or prior to
closing,  a convertible  mortgage  promissory  note in the  principal  amount of
$7,000,000  (see note 4) and 337,500 shares of the Company's  common stock.  The
common stock issued in connection  with the purchase was valued at $750,000.  In
addition,  the Company incurred transaction costs, primarily real estate closing
costs,  of $95,531 which were  capitalized as part of the cost of the Lauderdale
Property.

   The Company  intends to develop the property into a  comprehensive  music and
film  production  and  entertainment  facility.  The facility also serves as the
Company's corporate headquarters. In accordance with the terms and conditions of
the agreement  under which the Company  purchased the Lauderdale  Property,  the
Company has a right of first offer to purchase certain  additional real property
located directly adjacent to the existing property.

   Depreciation  expense was $106,763  for the year ended  December 31, 2004 and
$16,497 from May 20, 2003 (Inception) through December 31, 2003.


4. NOTES PAYABLE

Convertible Notes
   Convertible  Notes Payable consists of the following at December 31, 2004 and
2003:

<TABLE>
<CAPTION>
                                                                   2004            2003
                                                              ------------    ------------
<S>                                                           <C>             <C>
   First mortgage note secured by Lauderdale Property         $  7,000,000    $         --
   Second mortgage note secured by Lauderdale Property           3,000,000              --
   Other convertible notes and subordinated debentures           1,475,000         600,000
                                                              ------------    ------------
                                                                11,475,000         600,000
   Less: current portion                                        (7,150,000)       (600,000)
   Less: Discount on convertible mortgage and notes payable     (3,470,822)             --
                                                              ------------    ------------
   Notes payable, long term portion, net of discounts         $    854,178    $         --
                                                              ============    ============
</TABLE>


   As part of the purchase  price of the  Lauderdale  Property (see note 3), the
Company  issued to the  seller  on  December  22,  2004 a  convertible  mortgage
promissory note in the principal amount of $7,000,000. The note pays interest at
an annual rate of 6.5% and is  convertible  at any time at the  seller's  option
into shares of the  Company's  common stock at a  conversion  price of $2.50 per
share. A principal payment of $250,000 is due on June 25, 2005 and the remaining
balance of the note matures on December 22, 2005. At the closing of the purchase
of the Lauderdale Property, the Company made a prepayment into an escrow account
of $150,000  for  interest on the note and real estate  taxes on the  Lauderdale
Property  covering  the  quarterly  period  ending  March 31,  2005.  Additional
quarterly  prepayments of $145,000 are required to be put into escrow  beginning
March  22,  2005.  All of the  Company's  obligations  to the  seller  under the
convertible  promissory note and related agreements are secured by a mortgage on


                                       32
<PAGE>

                    AGU ENTERTAINMENT CORP. AND SUBSIDIARIES
                  (Formerly Lexington Baron Technologies, Inc.)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        AS OF DECEMBER 31, 2004 AND 2003

the  Lauderdale  Property,  including  all of the  Company's  rights,  title and
interest as lessor in and to all leases or rental arrangements of the Lauderdale
Property.

   Also on December 22, 2004, the Company issued a secured convertible term note
in the principal  amount of $3,000,000  to Mitchell  Entertainment  Company (the
"Mitchell  Note").  The note pays  interest  at an annual  rate of 10% and has a
maturity date of November 19, 2006. The note can be converted at any time by the
lender  into shares of the  Company's  stock at an initial  conversion  price of
$1.50  per  share,  subject  to  anti-dilution  protections  and  certain  other
adjustments.  In  connection  with the  issuance of this note,  the Company also
issued to the lender  warrants to  purchase  2,000,000  shares of the  Company's
common stock at an exercise  price of $2.00 per share.  In  connection  with the
issuance of the Mitchell Note, the Company incurred  deferred  financing fees of
approximately  $148,000,  which is reflected  in Other  Assets on the  Company's
balance  sheet.  The  Mitchell  note is  secured  by a  second  mortgage  on the
Lauderdale  Property and by  substantially  all of the  Company's  other assets,
including the capital stock of its subsidiaries.

   The  issuance  of the  warrants,  as well  as the  existence  of an  embedded
beneficial  conversion feature,  resulted in the Company recording a discount on
the Mitchell  Note of  $3,000,000  as of the date of issuance.  This discount is
being  accreted as interest  expense  from the date of issuance to the  Mitchell
Note's maturity date. In the event of early conversion or default, the remaining
discount would be recognized as interest expense during the period in which such
early conversion or default occurs.

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

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

   The  carrying  value of the  Mitchell  Note and the Galt Note at December 31,
2004 was  $45,205  and  $74,658  respectively.  The  unamortized  balance of the
discounts  on the  Mitchell  Note and the Galt  Note at  December  31,  2004 was
$2,954,795 and $425,342  respectively.  Notwithstanding  the financial statement
presentation  required under  accounting  principles  generally  accepted in the
United States of America,  the Company  remains  legally  obligated to repay the
$3,000,000  and  $500,000  principal  amounts  of the  Mitchell  and Galt  Notes
respectively,  on their  respective  maturity dates,  plus all accrued  interest
thereon in accordance with the terms of each note.

   During October,  November and December of 2004 the Company issued convertible
promissory  notes to various  accredited  investors in the  aggregate  principal
amount of $825,000.  The $825,000 of convertible promissory notes are due on the
second anniversary of their issuance date and are convertible into shares of the
Company's  common  stock at the option of each holder at a  conversion  price of
$3.00 per share.  The  Company  also issued a  promissory  note in the amount of
$225,000, $75,000 of which was repaid in the same period. The remaining $150,000
promissory  note is due June 30, 2005.  In  connection  with the issuance of the


                                       33
<PAGE>

                    AGU ENTERTAINMENT CORP. AND SUBSIDIARIES
                  (Formerly Lexington Baron Technologies, Inc.)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        AS OF DECEMBER 31, 2004 AND 2003

convertible  notes,  the Company  issued to the holders an  aggregate of 182,236
common stock  purchase  warrants to purchase the  Company's  common  stock.  The
common stock  purchase  warrants have a two year term and the exercise  price is
$3.00 per share. The common stock purchase warrants were valued at $93,634,  and
this amount was recorded as a discount to the convertible  promissory notes. The
unamortized  balance of the discount for these notes as of December 31, 2004 was
$90,685.

   During  2003  the  Company  issued   $600,000  of  convertible   subordinated
debentures and an additional  $50,000 of similar debentures in February of 2004.
All of these debentures,  plus accrued interest of $12,890,  were converted into
244,482  shares of the  Company's  common stock in 2004.  Also during 2004,  the
Company issued  $2,729,000 of promissory  notes that were converted,  along with
$70,736 of accrued  interest,  into 929,058 shares of the Company's common stock
prior to December  31,  2004.  Also during  2003,  the Company  entered  into an
installment note to purchase  equipment in the amount of $62,880.  Principal and
interest payments are paid monthly,  and the outstanding balance on this note as
of December 31, 2004 is $48,809.

Related Party Notes

   On March 3,  2004,  AGU  Music  entered  into an  Assignment  and  Assumption
Agreement with Pyramid Media Group, Inc. ("PMG") (of which a related party and a
shareholder of the Company own a controlling interest), whereby AGU Music agreed
to assume all of the  covenants  and  obligations  of a  Distribution  Agreement
between  PMG  and ARK 21  Records,  LP  ("ARK21").  The  Distribution  Agreement
provides that ARK21 be the  manufacturer  and  distributor  of certain  recorded
music  projects for AGU Music through  normal  retail  channels  throughout  the
United  States.  In exchange for the rights to the  Distribution  Agreement  and
certain  assets of PMG, AGU Music assumed the  obligation  to repay  $350,000 of
notes payable to certain  principals of PMG. PMC has  guaranteed  the payment of
these  notes,  which  have an annual  interest  rate of 8%, and mature on May 1,
2007.  Approximately $19,000 of these notes was paid in 2004 and the outstanding
balance as of December 31, 2004 is  approximately  $331,000.  The terms of these
notes require  monthly  payments of principal and interest.  The Company has not
made the required  monthly  principal and interest  payments since June of 2004,
and has been  negotiating  with the  holders to amend the  payment  terms of the
notes,  which would  include  waivers of default for the required  payments that
have not been made.  Under the terms of the note, if an event of default occurs,
the holders of the notes are  entitled to  accelerate  the maturity of the notes
and demand immediate payment of all outstanding principal.

   During 2003, the Company  received loans in the aggregate  amount of $114,400
from three shareholders of the Company. The loans pay interest at 5% and are due
June 30, 2005. During 2004 the Company received additional loans from an officer
of the Company and another  major  shareholder  in the amount of $283,000.  This
amount was repaid in 2004 with a portion of the proceeds from the Mitchell Note.

   Aggregate  maturities of the Company's  notes payable as of December 31, 2004
is as follows:

   Fiscal Year      Amount
   -----------   -----------
     2005        $ 7,607,782
     2006          4,337,986
     2007             13,890
     2008              9,793
                 -----------
                 $11,969,451
                 ===========


                                       34
<PAGE>

                    AGU ENTERTAINMENT CORP. AND SUBSIDIARIES
                  (Formerly Lexington Baron Technologies, Inc.)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        AS OF DECEMBER 31, 2004 AND 2003

5. CAPITAL LEASES

   The Company is obligated  under various capital  leases,  primarily  computer
equipment. For financial reporting purposes,  minimum lease payments relating to
the equipment have been capitalized.  Capital lease obligations totaling $25,757
require  minimum  monthly lease payments  ranging from $32 to $373 with interest
rates ranging from 15.5% to 17.8%.

   Future capital lease obligations as of December 31, 2004 are as follows:

                        2005                   $ 16,925
                        2006                     11,223
                        2007                      1,641
                        2008                         79
                                               --------
                        Principal                29,868
                        Interest                 (4,111)
                                               --------
                                                 25,757
                        Current Portion         (13,881)
                                               --------
                         Non-Current Portion   $ 11,876
                                               ========


   Equipment  leased under  capital  leases as of December 31, 2004,  amounts to
$30,268, net of accumulated depreciation of $17,271.


6. INTANGIBLES

   Intangible assets at December 31, 2004 are as follows:


                                Value at      Accumulated       Balance at
                              acquisition     amortization   December 31, 2004
                              -----------     ------------   -----------------
   Distribution
   agreement (see note 4)      $  350,000      $  (87,300)      $  262,700
   Other intangibles              651,035              --          651,035
                               ----------      ----------       ----------
   Total intangibles           $1,001,035      $  (87,300)      $  913,735
                               ==========      ==========       ==========

   The distribution agreement is being amortized on a straight line basis over a
period of three years.  Other  intangibles  pertain to costs to develop  network
logos,  graphic templates and on-air interstitials for The Tube. Under the terms
of an amended  agreement with the developer of these assets,  the Company agreed
to pay the developer  $200,000 in cash and 150,000  shares of common  stock.  At
December  31, 2004 $50,000 in cash and 121,875  shares of common stock  remained
due to the developer  under this  agreement.  The Company will begin  amortizing
these assets over their  estimated  useful lives upon the national launch of The
Tube,  which is expected  to take place in the first or second  quarter of 2005.
Aggregate  amortization expense over the next three years, assuming an estimated
useful  life of two  years  for the  other  intangibles,  is  expected  to be as
follows:


                                       35
<PAGE>

                    AGU ENTERTAINMENT CORP. AND SUBSIDIARIES
                  (Formerly Lexington Baron Technologies, Inc.)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        AS OF DECEMBER 31, 2004 AND 2003

      For the year ending December 31:
      2005                                   $360,805
      2006                                    442,184
      2007                                    110,746


7. COMMITMENTS AND CONTINGENCIES

Operating Leases
   The Company leases certain  equipment under  non-cancelable  operating leases
that expire at various dates through 2007. Rent expense for all operating leases
was $185,513 for the twelve months ending December 31, 2004 and $79,152 from May
20,  2003  (inception)  to December  31,  2003.  Future  minimum  annual  rental
obligations as of December 31, 2004 are as follows:


                                   Operating
Fiscal Year ended December 31,       Leases
------------------------------     ---------
   2005                             $23,731
   2006                              21,306
   2007                               1,186
                                    -------
                                    $46,223
                                    =======

Legal Proceedings

   On January 27,  2005,  the Company was served with a summons with notice (the
"Summons") by Jarred Weisfeld and Cherry Jones,  individually and doing business
as  JarredCherry  Productions  LLC the  "Plaintiffs"),  which indicates that the
Plaintiffs commenced an action against the Company. The Plaintiffs allege, among
other things,  breach of contract,  breach of implied covenant of good faith and
fair dealing,  unfair competition,  tortuous  misappropriation of goodwill,  and
deceptive  acts and  practices  pursuant to Section 349 of the New York  General
Business  Law.  This  dispute  stems  from  an  alleged  agreement  between  the
Plaintiffs  and the Company  related to the works of the late Mr. Russell Jones,
who was the son of Ms. Jones and the management client of Mr. Weisfeld. Although
the  Plaintiffs,  though the  Summons,  are seeking  compensatory  and  punitive
damages  of no less than  $1,812,500,  the  Plaintiffs  have not filed an actual
Complaint to state their  actual  legal case  against the  Company.  The Company
served on  Plaintiffs  and filed a Demand for Complaint in the  jurisdiction  in
which the Summons was filed by the  Plaintiffs.  The Plaintiffs were required to
respond within twenty calendar days as measured from February 23, 2005, to avoid
having the action dismissed.  The Plaintiffs did not respond within the required
20 calendar days, and therefore the Company is unable to determine the extent of
their  complaint.  Although the Company has expressly  denied any  allegation of
wrongdoing on its part and intends to vigorously  defend itself in this dispute,
the  Company is  currently  unable to predict the outcome of this action and any
financial exposure to the Company, if any.

   October 13, 2004, The Tube received  notification  from a television  channel
featuring  music  related  programming  that the circle logo used by The Tube is
"confusingly  similar"  to the  circle  logo  used by that  television  channel,
supporting claims of trademark infringement and unfair competition.  On November
3, 2004,  the Company  responded to the October 13,  letter  stating it does not
believe the logos are confusingly similar or that any trademark infringement has
occurred.  The  Company  has not  received a response  to its  November  3, 2004
letter. The Company intends to vigorously defend any challenge to its use of its
logo.

   The Company is subject to claims and legal actions that arise in the ordinary
course of its business.  The Company  believes that the ultimate  liability,  if
any,  with respect to these claims and legal  actions,  will not have a material
effect on the financial position or results of operations of the Company.


                                       36
<PAGE>

                    AGU ENTERTAINMENT CORP. AND SUBSIDIARIES
                  (Formerly Lexington Baron Technologies, Inc.)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        AS OF DECEMBER 31, 2004 AND 2003

8. STOCKHOLDERS' EQUITY

   The total  number of shares of all  classes  of stock  which the  Company  is
authorized to issue is 110,000,000  shares,  consisting of 10,000,000  shares of
preferred stock, no par value, (the "Preferred  Stock"),  and 100,000,000 shares
of common stock, no par value, (the "Common Stock").

   The Preferred  Stock may be issued from time to time in one or more series as
may be designated by the Board of Directors of the Company,  each such series to
be  distinctly  titled and to consist of the number of shares  designated by the
Board  of  Directors.  All  shares  of any one  series  of  Preferred  Stock  so
designated by the Board of Directors shall be alike in every particular,  except
that  shares of any one series  issued at  different  times may differ as to the
dates from which  dividends  thereon (if any) shall accrue or be cumulative  (or
both).

   The Common  Stock shall be  identical  and shall  entitle each of the holders
thereof to the same rights and  privileges.  When and as dividends  (if any) are
declared  upon the Common  Stock,  whether  payable in cash,  in  property or in
shares  of stock of the  Corporation,  the  holders  of  Common  Stock  shall be
entitled to share equally,  share for share, in such  dividends.  Each holder of
Common Stock shall be entitled to one vote per share.

   During  2004,  the Company  issued  195,958  shares of common  stock to third
parties in  exchange  for  services  performed.  These  services  were valued at
$329,866  and this amount was charged to earnings  during the year.  The Company
also issued  2,311,640  shares of common stock to employees in 2004 and recorded
compensation expense of $55,488. Also in 2004, the Company issued 337,500 shares
of common stock in connection  with the  acquisition of the Lauderdale  Property
(see note 3), 500,000 shares of common stock in connection  with the issuance of
a convertible  note,  1,173,540  shares of common stock in  connection  with the
conversion of debt and accrued  interest (see note 5),  337,500 shares of common
stock in connection  with the  acquisition of real property and 15,000 shares of
common stock in exchange for $60,000 in cash. In addition,  the recapitalization
resulting from the Share Exchange Agreement (see note 2) resulted in an increase
to the number of shares outstanding by 4,230,614.

   There were  23,392,576 and 14,628,234  shares of common stock  outstanding at
December 31, 2004 and 2003 respectively.

   On October 20,  2004,  the  Company's  shareholders  approved  The 2004 Stock
Option and Stock  Incentive  Plan ("the  Plan").  The  purpose of the Plan is to
promote the long-term interests of the Company and its shareholders by providing
a means for attracting and retaining officers, directors and other key employees
of and  consultants to the Company and its affiliates by providing for awards in
the form of options to purchase the  Company's  common stock or grants of shares
of restricted stock. No awards were granted under the Plan during 2004 and there
were no stock  options  outstanding  under the Plan as of December  31, 2004 and
2003.

   During 2004 the Company  issued  2,682,236  detached  common  stock  purchase
warrants to acquire the Company's  common stock in connection  with the issuance
of convertible  promissory notes (see note 4). The warrants have exercise prices
ranging from $1.00 to $3.00 per share and generally expire on the maturity dates
of the respective  convertible  promissory notes with which they were issued. No
warrants were exercised during 2004 and all 2,682,236  warrants were outstanding
at December 31, 2004.


                                       37
<PAGE>

                    AGU ENTERTAINMENT CORP. AND SUBSIDIARIES
                  (Formerly Lexington Baron Technologies, Inc.)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        AS OF DECEMBER 31, 2004 AND 2003

9. INCOME TAXES

   The components of the provision (benefit) for income taxes consist of the
following

                                                            2004      2003
                                                            ----      ----
Current provision (benefit):
       Federal                                               $--       $--
       State                                                  --        --
                                                             ---       ---
Total current                                                 --        --
Deferred provision (benefit):
       Federal                                                --        --
       State                                                  --        --
                                                             ---       ---
Total deferred                                                --        --
                                                             ---       ---
                                                             ---       ---
Total provision (benefit) for income taxes                   $--       $--
                                                             ===       ===

   The  reconciliation  of the Company's  tax benefit based on the U.S.  federal
statutory income tax rate to the Company's effective tax rate is as follows:

                                                         2004           2003
                                                     -----------    -----------
Tax at U.S. federal statutory tax of 34%             $(2,002,733)   $  (275,831)
Increase in federal valuation reserves                 1,908,321        274,780
Permanent items                                           94,412          1,051
State income tax effect, net of federal benefit               --             --

Other                                                         --             --
                                                     -----------    -----------
Total income tax benefit                             $        --    $        --
                                                     ===========    ===========

   Deferred  income taxes  reflect the net tax effects of temporary  differences
between the carrying  amounts of assets and liabilities for financial  reporting
purposes and the amounts used for income tax purposes. Significant components of
the Company's  deferred tax assets and deferred tax  liabilities  as of December
31, 2004 and December 31, 2003 are as follows:

                                                       2004             2003
                                                   -----------      -----------
Deferred Tax Assets (Liabilities)
       Net operating loss carryforwards            $ 2,251,379      $    38,929
       Start-up expenses                               127,316          165,511
       Organizational expenditures                      95,599          124,279
       Other                                            35,033              380
       Property, plant & equipment                      (8,947)         (22,525)
       Other                                            (2,316)             (--)
                                                   -----------      -----------
                                                     2,498,064          306,574
                                                   -----------      -----------
       Less: Valuation allowance                    (2,498,064)        (306,574)
                                                   -----------      -----------
Net Deferred Tax Asset (Liability)                 $        --      $        --
                                                   ===========      ===========


The  valuation  allowances  as of December 31, 2004,  and December 31, 2003 were
established due to the Company's  determination  that it is more likely than not
that the Company will not generate  sufficient  future taxable income to utilize
its deferred tax assets. The valuation allowance increased by $2,132,829, net of
the effects of the reverse acquisition transaction (see note 2) during 2004. The
Company has approximately $5.9 million of net operating loss carryforwards which
begin to expire in 2023.  A portion of these  losses is  subject to  limitations


                                       38
<PAGE>

                    AGU ENTERTAINMENT CORP. AND SUBSIDIARIES
                  (Formerly Lexington Baron Technologies, Inc.)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        AS OF DECEMBER 31, 2004 AND 2003

regarding  the  offset  of  the  Company's  future  taxable  income,   including
limitations  resulting  from  changes in  ownership  of greater  than 50% of the
Company's  common stock as a result of the issuance by the Company of additional
common stock.


10. SEGMENT REPORTING

   The Company has three reportable operating segments:  The Tube, AGU Music and
AGU  Studios.  The Tube airs  traditional  music  videos  and live  concerts  of
contemporary  music  material  that is  derived  from  archived  video and music
collection libraries. When fully operational,  the Company expects that The Tube
will generate  revenues by selling  advertising time and through direct sales of
music related to the content  broadcasted on the network.  AGU Music is a record
company  engaged in the release of recorded  music  materials  acquired  through
artist signings and  acquisitions.  AGU Studios,  when fully  operational,  will
become a  comprehensive  media  entertainment  Center,  which will  offer  film,
television  and music  production  facilities,  sound stages for  recording  and
executive  offices  for  AGU's  operations  and  other  entertainment   industry
organizations. The Company expects to generate revenue by offering technical and
production services in the areas of film,  television and music production,  and
through the rental of office and studio space.  The accounting  policies of each
segment are the same as those described in the summary of significant accounting
policies  (see Note 1). Each segment is  separately  managed and is evaluated by
the Company's chief operating  decision makers for the purpose of allocating the
Company's  resources.  The Company  also has a corporate  headquarters  function
which does not meet the criteria of a  reportable  operating  segment.  Interest
expense and corporate expenses are not allocated to the operating segments.

   The table below presents  information about reportable  segments for the year
ended December 31, 2004 and for the period from May 20, 2003 (inception)  though
December 31, 2003.


                                       39
<PAGE>

                    AGU ENTERTAINMENT CORP. AND SUBSIDIARIES
                  (Formerly Lexington Baron Technologies, Inc.)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        AS OF DECEMBER 31, 2004 AND 2003

<TABLE>
<CAPTION>
                                                                 2004           2003
                                                             -----------    -----------
<S>                                                          <C>            <C>
Revenues
       AGU Music                                             $   906,605    $    93,209
       AGU Studios                                                50,325             --
       The Tube                                                       --             --
                                                             -----------    -----------
           Consolidated revenues                             $   956,930    $    93,209
                                                             ===========    ===========

Operating loss
       AGU Music                                              (1,344,827)        21,803
       AGU Studios                                              (103,281)            --
       The Tube                                               (2,554,618)       (87,253)
                                                             -----------    -----------
           Segment loss                                       (4,002,726)       (65,450)
       Corporate                                              (1,583,911)      (741,854)
                                                             -----------    -----------
           Consolidated operating loss                        (5,586,637)      (807,304)
                                                             ===========    ===========

Depreciation and amortization
       AGU Music                                                 100,699              6
       AGU Studios                                                 3,148             --
       The Tube                                                   44,456             --
                                                             -----------    -----------
           Segment total                                         148,303              6
       Corporate                                                  45,760         16,491
                                                             -----------    -----------
           Consolidated depreciation and amortization            194,063         16,497
                                                             ===========    ===========

Expenditures for long-lived assets
       AGU Music                                                  13,566         14,720
       AGU Studios                                               955,531             --
       The Tube                                                  326,710             --
                                                             -----------    -----------
           Segment total                                       1,295,807         14,720
       Corporate                                                 181,686         42,195
                                                             -----------    -----------
           Consolidated expenditures for long lived assets     1,477,493         56,915
                                                             ===========    ===========
</TABLE>

The table  below  reconciles  the  measurement  of segment  profit  shown in the
previous table to the Company's consolidated income before taxes:

                                 2004           2003
                             -----------    -----------
Total segment loss           $(4,002,726)   $   (65,450)
Operating loss - corporate    (1,583,911)      (741,854)
Interest expense                (303,753)        (3,963)
                             -----------    -----------
Loss before income tax       $(5,890,390)   $  (811,267)
                             ===========    ===========
The table below shows information regarding segment assets:


                                       40
<PAGE>

                    AGU ENTERTAINMENT CORP. AND SUBSIDIARIES
                  (Formerly Lexington Baron Technologies, Inc.)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        AS OF DECEMBER 31, 2004 AND 2003

                                           2004          2003
                                       -----------   -----------
Segment assets
       AGU Music                       $   845,722   $    65,617
       AGU Studios                       8,729,442            --
       The Tube                            800,506         1,592
                                       -----------   -----------
           Segment total                10,375,670        67,209
       Corporate                         1,317,227       240,936
                                       -----------   -----------
           Consolidated total assets   $11,692,897   $   308,145
                                       ===========   ===========


   With the exception of de minimus sales generated in Canada by AGU Music,  the
Company did not generate any revenues  outside the United States of America from
inception  through  December 31,  2004,  and the Company did not have any assets
located outside the United States of America.  No single customer  accounted for
more  than  10% of the  Company's  consolidated  revenues  for the  years  ended
December 31, 2004 and 2003.

11. RELATED PARTY TRANSACTIONS

   For the period from May 20, 2003  (inception)  through December 31, 2004, the
Company received various computer and internet  services totaling $36,000 from a
shareholder. In June 2004 the entire amount was converted into common stock.

   For the period from May 20, 2003  (inception)  through  December,  2004,  the
Company received various  consulting  services totaling  approximately  $159,000
from a shareholder. At December 31, 2004 approximately $7,000 was unpaid.

   Additionally,  two  officers  of the  Company  agreed to defer a  portion  of
salary,  payable under employment agreements until such time as adequate capital
has been raised by the Company.  The amount deferred as of December 31, 2004 was
approximately $85,000.

   On  March  3,  2004,  in  connection  with  the  Distribution  Agreement  and
assignment  of  certain  assets of PMG (see Note 5),  the  Company  assumed  the
obligation  to  repay  $350,000  of notes  payable  to two  shareholders  of the
Company.  The notes have an annual  interest rate of 8%.  Payments  commenced in
March of 2004,  and the balance due as of  December  31, 2004 was  approximately
$331,000.  The terms of these notes  require  monthly  payments of principal and
interest.  The Company has not made the required monthly  principal and interest
payments  since June of 2004, and is currently  negotiating  with the holders to
amend the  payment  terms of the notes,  which  would  include  waivers  for the
required  payments  that were not made.  A former  officer of the  Company is an
owner and controlling shareholder of PMG.

   On July 25, 2003, we received loans from and executed three  promissory notes
totaling $114,400 in favor of DML Marketing Corp., an entity controlled by Donna
M. Levy,  the wife of David C. Levy, in the principal  amount of $59,900 and Ned
Siegel and Neil Strum,  collectively,  in the  principal  amounts of $39,000 and
$15,500.  The  notes  accrue  interest  at an  annual  rate of 5% and  mature on
November 1, 2004. DLM Marketing  agreed to extend the due date on its note until
June 30, 2005. We are seeking a similar extension with Ned Siegel and Neil Strum
however there can be no  assurances  that we will be successful in obtaining one
we may be forced to refinance these notes on terms less favorable to us than the
existing notes.

   In June 2004,  we  received  loans from and  executed  two  promissory  notes
totaling  $235,000 in favor of DML Marketing  Corp.  in the principal  amount of
$150,000,  which  matures on  October  30,  2004,  and John P.  Grandinetti  , a
shareholder,  in the principal  amount of $85,000,  which matures on October 30,
2004. The notes accrue interest at an annual rate of 5%. These notes were repaid
in December 2004.


                                       41
<PAGE>

                    AGU ENTERTAINMENT CORP. AND SUBSIDIARIES
                  (Formerly Lexington Baron Technologies, Inc.)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        AS OF DECEMBER 31, 2004 AND 2003

        In August 2004 and in October 2004, we received  loans from and executed
promissory notes in the principal amount of $40,000 and $1,000 respectively,  in
favor of DML Marketing  Corp. The notes accrue  interest at an annual rate of 5%
and mature on November 1, 2004. These notes were repaid in December 2004.

   Accounts   payable  to  related   parties  at  December   31,  2004   totaled
approximately $120,000 Included in this amount was $1,000 in consulting services
and expenses provided by a director.

   In December 2004 the Company offset a note  receivable from an officer in the
amount of $15,500  against  deferred  salary,  which had been deferred  under an
employment agreement noted above.

   Effective  December 8, 2004,  Allen  Jacobi  resigned as president of Pyramid
Records International,  Inc., one of our subsidiaries.  We were not obligated to
make  any  payments  to him  under  the  termination  provisions  of his  former
employment  agreement.  On December 8, 2004, as part of his resignation,  we and
our  subsidiaries  entered into a mutual release and  settlement  agreement with
Allen Jacobi,  Josh Danoff,  Jeff Shane,  Delsy  Gutierrez,  each an employee of
Allen Jacobi,  Pyramid Records Corp., a Florida  corporation,  and Pyramid Media
Group, Inc., referred to herein as the Pyramid Parties.

   Under the terms of the mutual release and settlement  agreement,  the Pyramid
Parties had to deliver all rights to certain  master  recordings  to us, pay all
brokerage  commissions under the license  agreement,  deliver all business files
and computers to us, forfeit all rights to a telephone number and notify parties
to certain  agreements that the Pyramid Parties are no longer  authorized to act
on our behalf. The terms of the mutual release and settlement agreement provided
for us to pay  $11,000  for an  outstanding  legal bill owed by Pyramid  Records
Corp., permit Allen Jacobi to retain $40,000 received under a license agreement,
transfer any rights to the existing  Stephen  Stills  contract to Allen  Jacobi,
subject to  approval  by the artist,  and  relinquish  all rights to an internet
domain name. We were also entitled to all future monies to be received under the
license agreement.

12. COMPREHENSIVE LOSS

   There were no  components  of  comprehensive  loss other than net loss.  As a
result, comprehensive loss was equal to net loss for the periods presented.

13. GOING CONCERN

   The  accompanying   consolidated  financial  statements  have  been  prepared
assuming  that the Company  will  continue  as a going  concern.  The  Company's
financial  condition  and  operating  results,  specifically  a working  capital
deficiency   of   approximately   $7.7  million  and   accumulated   deficit  of
approximately  $6.7  million  at  December  31,  2004,  as well as a net loss of
approximately $5.9 million and net cash used in operations of approximately $5.0
million for the fiscal year ended  December 31, 2004,  raise  substantial  doubt
about its ability to continue as a going  concern.  The  Company's  existence is
dependent on Management's  ability to develop profitable  operations and resolve
the Company's liquidity problems.  Management  anticipates that the Company will
attain  profitable  status and  improve  its  liquidity  through  the  continued
development of the Company's television network, recorded music business and the
Lauderdale Property.

   In order to improve the Company's liquidity, management is actively exploring
methods of raising  additional  capital.  There can be no assurance  the Company
will be successful in its efforts to raise additional financing. These financial
statements do not include any adjustments  that might result from the outcome of
this uncertainty.


                                       42
<PAGE>

                    AGU ENTERTAINMENT CORP. AND SUBSIDIARIES
                  (Formerly Lexington Baron Technologies, Inc.)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        AS OF DECEMBER 31, 2004 AND 2003

14. SUBSEQUENT EVENTS

   In January and  February of 2005,  the Company  issued  additional  shares of
common stock as follows:

      o  444,000  shares to an officer of the  Company  in  accordance  with the
         original terms of his employment contract
      o  121,875  shares in  connection  with the 2004  acquisition  of  certain
         intangible assets (see note 6)
      o  97,800  shares in  connection  with the  acquisition  of  property  and
         equipment
      o  85,540 shares to employees
      o  68,570  shares in exchange for  professional  services  received by the
         Company
      o  5,000 shares for compensation of outside  directors
      o  5,000 shares as a share price adjustment for certain investors

   In February of 2005,  the Company formed two new  subsidiaries,  AGU Studios,
Inc.,  ("AGU Studios") a Florida  corporation,  and 3200 Oakland Park Boulevard,
Inc., a Florida  corporation.  In March of 2005, the Company changed the name of
PRI to AGU Music, Inc. ("AGU Music").


                                       43
<PAGE>

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

   On June 8, 2004, we notified our principal accountants, Cordovano and Honeck,
P.C., that we were  terminating  their  engagement as principal  accountants and
engaging Weinberg & Company, P.A. ("Weinberg") as our new principal accountants.
The  termination  of Cordovano and Honeck,  P.C. and the  engagement of Weinberg
were approved by our Audit Committee.  The reports of Cordovano and Honeck,  P.C
on our consolidated  financial  statements for the previous two fiscal years did
not  contain  an adverse  opinion  or a  disclaimer  of  opinion,  nor were they
qualified or modified as to uncertainty,  audit scope, or accounting principles,
except as follows:

   Cordovano and Honeck, P.C.'s report on the consolidated  financial statements
of AGU Entertainment Corp. as of and for the two fiscal years ended December 31,
2002 and 2003  contained a separate  paragraph  stating  that "the  accompanying
consolidated   financial   statements  have  been  prepared  assuming  that  AGU
Entertainment   will  continue  as  a  going   concern.   As  discussed  in  AGU
Entertainment's  notes  to  the  financial  statements,  AGU  Entertainment  has
suffered   significant   operating  losses  since  inception,   which  raises  a
substantial   doubt  about  its  ability  to  continue  as  a  going   concern."
Management's  plans in regard to this matter are also described in Note 9 to the
audited  financial  statements of Pyramid Music Corp. and  Subsidiaries  ("PMC")
filed with the  Securities  and  Exchange  Commission  on Form 8-K/A on June 15,
2004. The consolidated  financial statements do not include any adjustments that
might result from the outcome of this uncertainty.

   In connection with its audits of the two fiscal years ended December 31, 2002
and 2003, and the review of the consolidated  financial statements through March
31, 2004,  there were no  disagreements  with  Cordovano and Honeck,  P.C on any
matter of accounting principles or practices,  financial statement disclosure or
auditing  scope or  procedure  which  disagreements,  if not  resolved  to their
satisfaction  would have caused them to make reference in connection  with their
opinion to the subject matter of the  disagreement.  We requested  Cordovano and
Honeck,  P.C to  furnish  a letter  addressed  to the  Securities  and  Exchange
Commission  stating  whether  Cordovano and Honeck,  P.C.  agrees with the above
statements.  A copy of that letter, dated June 11, 2004, was filed as Exhibit 16
to Form 8-K/A filed with the  Securities  and  Exchange  Commission  on June 15,
2004.

   On June 8, 2004,  we engaged  the firm of Weinberg  and  Company  P.A. as our
independent principal accountants to audit our financial statements for the 2004
fiscal year. During the two most recent fiscal years and the first quarter 2004,
neither we, nor anybody on our behalf,  consulted the newly engaged  accountants
regarding the application of accounting  principles to a specified  transaction,
either  completed  or  proposed,  or the type of  audit  opinion  that  might be
rendered on our financial statements.

Item 8A. CONTROLS AND PROCEDURES

   The  Company,  under  the  supervision  and  with  the  participation  of its
management,  including its principal  executive officer and principal  financial
officer,  evaluated  the  effectiveness  of  the  design  and  operation  of its
disclosure  controls and  procedures as of the end of the period covered by this
report. Based on this evaluation,  the principal executive officer and principal
financial  officer  concluded  that, as of the end of the period covered by this
report,  the Company's  disclosure  controls and  procedures  were  effective in
reaching a reasonable  level of assurance  that  management is timely alerted to
material  information related to and during the period when our periodic reports
are being prepared.

   A control system, no matter how well conceived and operated, can provide only
reasonable,  not absolute,  assurance  that the objectives of the control system
are met.  Further,  the design of a control  system  must  reflect the fact that


                                       44
<PAGE>

there are resource constraints,  and the benefits of controls must be considered
relative to their  costs.  Because of the  inherent  limitations  in all control
systems,  no  evaluation  of controls can provide  absolute  assurance  that all
control  issues and  instances  of fraud,  if any,  within the Company have been
detected.  Because  of the  inherent  limitations  in a  cost-effective  control
system, misstatements due to error or fraud may occur and not be detected.

   There has been no change in the  Company's  internal  control over  financial
reporting that occurred during the Company's most recent fiscal quarter that has
materially affected, or is reasonably likely to materially affect, the Company's
internal control over financial reporting.

Item 8B. OTHER INFORMATION

   None.

                                       45
<PAGE>

PART III.

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

   The members of the board of  directors  of the  Company  serve until the next
annual meeting of stockholders, or until their successors have been elected. The
officers serve at the pleasure of the board of directors.

   From the Company's inception until the Stock Exchange, Phillip Kilgore served
as Chairman,  President,  Chief Financial  Officer and Secretary of the Company,
Jeffrey Neal served as Vice President, and David Goller served as Executive Vice
President.  Upon the consummation of the Share Exchange,  Mr. Kilgore, Mr. Neale
and Mr. Goller resigned.

   The following table sets forth information  regarding the Company's directors
and  executive   officers  as  of  December  31,  2004.   There  are  no  family
relationships among any of our directors and officers.

Name                      Age      Positions

Michael Jay Solomon       68       Director and Chairman of the Board
David C. Levy             53       Director and President of the Company
Les Garland               52       Director, Senior Executive Vice President of
                                   the Company and President of The Tube
Marc Gelberg              39       Director
Gregory R. Catinella      54       Director
John W. Poling            59       Director, Executive Vice President of the
                                   Company and Chief Financial Officer

   Michael Jay Solomon has served as Chairman of AGU since 2002. Since 2002, Mr.
Solomon  has  been  the  Chairman  and  Chief  Executive  Officer  of El  Camino
Entertainment  Group,  Inc.  El Camino  Entertainment  Group,  Inc. is a company
dedicated to building a live family  entertainment  company on a national  basis
through the consolidation of family run companies that operate rides,  games and
food at state and county fairs and carnivals  throughout the United States.  Mr.
Solomon  became a director of AGU upon the  consummation  of the share  exchange
with Pyramid  Music Corp.  in April 2004.  Prior to 2002,  Mr.  Solomon has been
involved in his personal investments, charities and educational organizations.

   David C. Levy has served as  President  of AGU since  2004.  Prior to joining
AGU, Mr. Levy was the Vice  President of Business  Development  of  Northwestern
Bell Phones, a manufacturing and marketing company of consumer  electronics from
1995 to 2003.  Mr.  Levy  became the  president  and a director  of AGU upon the
consummation  of the share  exchange  with Pyramid Music Corp. in April 2004. In
the late 1970's,  Mr. Levy managed hit dance music group  "Foxy," which had a #1
record titled "Get Off" and a gold album.

   Les Garland has served as  President  of The Tube Music  Network,  Inc.,  our
wholly owned  subsidiary,  since 2003 and as  President of Afterplay  Marketing,
Inc., a Nevada company,  since 1995. Mr. Garland is also a Senior Executive Vice
President of the Company. From 1998 to 2000, Mr. Garland was a consultant to the
College Television  Network, a television network on college campuses across the
United States. Mr. Garland became a director of AGU upon the consummation of the
share  exchange  with  Pyramid  Music  Corp.  in April 2004.  Mr.  Garland was a
co-founder/originator  of both MTV:  Music  Television  and VH-1.  In 1987,  MTV
Networks  was sold to Viacom for over $1  billion.  In the 1990's,  Mr.  Garland
played  an  essential  role in the  domestic  and  international  launch  of the
interactive  music channel,  The Box, acting as senior executive vice president.


                                       46
<PAGE>

Responsible for  entertainment  programming,  promotion,  advertising  sales and
marketing, Mr. Garland oversaw the rollout of the channel from a base of 200,000
homes at its  inception to more than 30 million U.S.  households  and 25 million
households  internationally.  In 1998, The Box was sold to Viacom. Mr. Garland's
next  venture was College  Television  Network.  He was involved in the rollout,
which put the  network on college  campuses  across the  country.  In 2000,  the
College Television Network was sold to Viacom.

   Marc Gelberg serves as chairman of the Audit Committee.  Mr. Gelberg has held
a variety of finance and accounting  positions at several Fortune 1000 companies
including  Wyeth,  MTV Networks,  Standard Motor Products,  Inc. and FPL Energy,
LLC.  Mr.  Gelberg  has been  Manager  of  Financial  Reporting  at Vision  Care
Holdings,  LLC  since  June of 2004.  From May 2003 to May 2004 he was a project
controller  at FPL Energy,  LLC and was Director of Financial  Reporting at U.S.
Plastic  Lumber Corp.  from July 2000 through May 2003.  In July of 2004,  U. S.
Plastic Lumber Corp. filed for protection under the federal bankruptcy laws. Mr.
Gelberg  received his CPA license in the state of New York in 1994.  Mr. Gelberg
became a director of the Company in November 2004.

   Gregory R.  Catinella has been the owner of Catinella  Realty,  a real estate
investment  company,  since January 2004. Prior to owning Catinella Realty,  Mr.
Catinella was Chairman and President of Catinella Consulting Inc., a provider of
consulting,  marketing and business  development  services to public and private
companies,  from 1986 to 2004.  Mr.  Catinella  became a director of the Company
upon the  consummation  of the share  exchange with Pyramid Music Corp. in April
2004.

   John W. Poling has served as our Executive Vice President and Chief Financial
Officer since November 1, 2004, and was  chairperson of our audit committee from
April 1, 2004 until his appointment as our chief financial  officer.  Mr. Poling
was a partner at Tatum Partners,  LLP, from 2002 to 2004.  Tatum  Partners,  LLP
provides financial services to emerging growth,  middle market and multinational
companies.  Prior to joining  Tatum  Partners,  LLP, Mr.  Poling served as Chief
Financial  Officer of U.S.  Plastic Lumber Corp., a manufacturer and distributor
of plastic  lumber  products,  from 1999 to 2002. In July of 2004, U. S. Plastic
Lumber Corp. filed for protection under the federal  bankruptcy laws. Mr. Poling
serves  on the board of  directors  of  Kreisler  Manufacturing  Corporation,  a
manufacturer  and  distributor of metal aircraft  engine and industrial  turbine
components,  SystemOne  Technologies  Inc., a  manufacturer  and  distributor of
self-contained  recycling  parts  washers.  From 2002 to 2004,  Mr.  Poling also
served as a Director of National Earth Services, Inc., an environmental services
company.  Mr. Poling became a director of AGU upon the consummation of the share
exchange with Pyramid Music Corp. in April 2004.

   Upon the  consummation  of the  merger  on  October  21,  2004,  our board of
directors  was divided into three  classes,  designated as Class I, Class II and
Class  III.  The term of the Class I  directors  expires  after the 2005  annual
meeting of  stockholders,  the term of the Class II directors  expires after the
2006 annual  meeting of  stockholders,  and the term of the Class III  directors
expires after the 2007 annual meeting of stockholders.  After each such meeting,
the newly elected  directors will serve three-year  terms. Upon the consummation
of the merger,  Mr. Solomon and Mr. Catinella were designated Class I directors,
Mr. Levy was designated a Class II director, and Mr. Garland and Mr. Poling were
designated Class III directors.  Upon his appointment to our board of directors,
Mr. Gelberg was designated a Class I director.

   The board of directors has determined that Marc Gelberg is a financial expert
serving on our audit committee. Mr. Gelberg is an independent director. Although
the board of directors has determined Mr. Gelberg is an  "independent"  director
within the meaning of Rule 4200 (a) (15) of the Nasdaq Stock Market  Rules,  Mr.
Gelberg  would not  satisfy  the  NASDAQ  Stock  Market  Rules for  independence
requirements  for  audit  committee  members  as a  result  of  his  receipt  of
consulting fees from the Company during 2004.


                                       47
<PAGE>

   The board of  directors  has  adopted a code of ethics  that  applies  to the
Company's principal executive officer, principal financial officer and principal
accounting  officer or controller.  The code of ethics was previously filed with
the Commission in the Company's  definitive  proxy statement on Schedule 14A for
the 2004 annual meeting.

Section 16(a) Beneficial Ownership Reporting Compliance

   Each of Michael Jay Solomon, John W. Poling, Les Garland, Allen Jacobi, David
Levy, Marc Gelberg and Gregory  Catinella failed to file his report on Form 3 on
a timely basis. Each such person, other than Marc Gelberg, filed one late report
relating to one  transaction.  Mr. Gelberg filed one late report relating to two
transactions.  Michael Jay Solomon and Gregory Catinella each failed to file his
report on Form 4 on a timely  basis.  Each filed one late report  related to one
transaction.


Item 10. EXECUTIVE COMPENSATION

Summary Compensation Table

   The following table sets forth the total  compensation paid to or accrued for
the fiscal years ended  December 31, 2004 and 2003 Chief  Executive  Officer and
our other most highly compensated executive officers.


<TABLE>
<CAPTION>
                                                  Other                        All
Name and Principal   Fiscal                      Annual       Restricted      Other
   Position           Year    Salary    Bonus  Compensation  Stock Awards  Compensation
-------------------  ------  --------  ------  ------------  ------------  ------------
<S>                   <C>    <C>          <C>           <C>           <C>   <C>
David Levy            2004   $172,000       0             0             0   $13,695(1)
President and         2003   $  3,607       0             0             0   $11,934(1)
Director of the       2002   $      0       0             0             0   $       0
Company
-------------------  ------  --------  ------  ------------  ------------  ------------
Les Garland,          2004   $397,343       0             0             0   $  1031(2)
Executive Vice        2003   $ 64,421  29,000             0             0           0
President and         2002   $      0       0             0             0           0
Director of the
Company
-------------------  ------  --------  ------  ------------  ------------  ------------
John W. Poling        2004   $ 45,500       0             0             0           0
Executive Vice        2003   $      0       0             0             0           0
President and         2002   $      0       0             0             0           0
Director of the
Company (3)
-------------------  ------  --------  ------  ------------  ------------  ------------
Allen Jacobi (4)      2004   $147,692       0             0             0   $  40,000
                      2003   $  7,692       0             0             0           0
                      2002   $      0       0             0             0           0
-------------------  ------  --------  ------  ------------  ------------  ------------
Phillip Kilgore (5)   2004   $      0       0             0             0           0
                      2003   $      0       0             0             0           0
                      2002   $      0       0             0             0           0
-------------------  ------  --------  ------  ------------  ------------  ------------
</TABLE>


                                       48
<PAGE>


(1)Includes   compensation  for  an  automobile  allowance  $12,664  and  health
insurance $1,031
(2) Includes compensation for health insurance $1,031
(3)Mr. Poling was appointed Executive Vice President of the Company effective as
of November, 1 2004
(4)Mr.  Jacobi and the Company  entered  into a Mutual  Release  and  Settlement
Agreement on December 8, 2004 and is no longer employed at the Company.
(5) Mr.  Kilgore was CEO of the Company until the Share  Exchange  Agreement was
executed on April 1, 2004

Employment Agreements

   David Levy. Under an employment  agreement,  dated as of April 1, 2004, David
Levy  serves  as our  President  and  Chief  Executive  Officer.  The  agreement
terminates on March 23, 2009 and may be extended for subsequent one-year periods
by both parties  signing an extension  prior to 30 days of the expiration  date.
Under the  agreement,  Mr.  Levy is  entitled  to  receive  an annual  salary of
$350,000 or such greater  amount as the board of directors may  determine.  This
annual  salary  increases 5% on March 23, 2005.  Under the  agreement,  Mr. Levy
deferred  any  salary in excess of $2,500 per week  until the  Company  raises a
minimum of $5,000,000 in equity or equity equivalents. If Mr. Levy is terminated
without  cause,  the  Company  must pay him any of his  annual  salary  that has
accrued,  and an amount equal to the lesser of his annual  salary for the number
of  months  remaining  in the  term  of the  agreement  or  his  monthly  salary
multiplied by 24.

   Michael Jay Solomon.  Under an employment  agreement,  dated as of October 1,
2003 and amended as of  December 1, 2003,  Michael Jay Solomon has served as our
Chairman. The agreement was terminated in January 2005 and will be replaced by a
new employment  agreement  under which Mr. Solomon will become  President of AGU
Studios  Inc.  Mr.  Solomon  continues  to serve  as  Chairman  of our  Board of
Directors.

Les Garland. Under an employment agreement,  dated July 2003, Les Garland serves
as Chief Operating Officer of The Tube Music Network,  Inc. Under the agreement,
Mr. Garland is entitled to receive an annual salary of $350,000.  If Mr. Garland
is terminated  without  cause or resigns for good reasons,  the Company must pay
him  monthly  installments  during  the  severance  period  in  amount  equal to
one-twelfth  of his base salary.  If the Company  undergoes a change of control,
the Company must pay Mr. Garland a fee equal to 3% of the aggregate market value
of the business  combination,  with a minimum of $3 million and a maximum of $10
million.  If Mr. Garland introduces the transaction to the Company,  there is no
maximum.

John W. Poling Under an employment  agreement dated November 1, 2004, Mr. Poling
serves as our Executive Vice President and Chief  Financial  Officer.  Under the
agreement, Mr. Poling is entitled to receive an annual salary of $200,000. Under
the agreement,  any salary in excess of $1,346.15 per week is deferred until the
Company raises a minimum of $5,000,000 in equity or equity  equivalents.  If Mr.
Poling is terminated without cause he will be entitled to severance equal to one
year's salary and payable in twelve (12) monthly payments.

Allen Jacobi.  Under an employment  agreement,  dated as of April 1, 2004, Allen
Jacobi  served as  president of Pyramid  Records  International,  Inc.,  now AGU
Music.  The agreement  was  scheduled to terminate on March 23, 2009.  Under the
agreement, Mr. Jacobi was entitled to receive annual compensation of $200,000 or
such greater amount as the board of directors determined.  The annual salary was
scheduled to increase 5% on March 23, 2005.  The agreement also provided that if
Mr. Jacobi was  terminated  without  cause,  we had to pay him any of his annual


                                       49
<PAGE>

salary that had accrued,  and an amount equal to the lesser of his annual salary
for the number of months  remaining in the term of the  agreement or his monthly
salary  multiplied by 18.  Effective  December 8, 2004, Allen Jacobi resigned as
president of Pyramid Records  International,  Inc. We were not obligated to make
any  payments  to  him  under  the  termination  provisions  of  his  employment
agreement.

Compensation of Directors

      Each non-employee  director is paid $2,500 in cash and 2,500 shares of our
common stock per quarter.


                                       50
<PAGE>




Item 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT


   The  following  table  sets forth  certain  information  with  respect to the
beneficial  ownership of the Company's  common stock as of December 31, 2004, by
each  person  known  by the  Company  to own  beneficially  more  than 5% of the
Company's  common stock;  each of the Company's named executive  officers;  each
director of the Company;  and all of the  executive  officers and directors as a
group.

   The amount and percentage of common stock  beneficially owned are reported on
the basis of  regulations of the SEC governing the  determination  of beneficial
ownership of securities.  Under the rules of the SEC, a person is deemed to be a
beneficial owner of a security if that person has or shares voting power,  which
includes the power to dispose of or to direct the  disposition  of the security.
Unless otherwise indicated below, each beneficial owner named in the table below
has sole  voting  and sole  investment  power with  respect to all shares  owned
beneficially. The percentage of beneficial ownership of common stock is based on
23,392,576 shares outstanding as of December 31, 2004.


<TABLE>
<CAPTION>
                                                                           Percentage of
                                                        Shares              Outstanding
Name and Address of Beneficial Owner(1)            Beneficially Owned    Common Stock Owned
---------------------------------------            ------------------    ------------------
<S>                                                     <C>                     <C>
Michael Jay Solomon
   Chairman of the Board of  Directors of the
Company .......................................         444,444(2)              1.9%

Les Garland
   President  of The Tube and Director of the
Company .......................................       1,542,000                 6.6%

Allen Jacobi
11077 Biscayne Blvd ...........................
Miami, FL 33363
   Former President of Pyramid Records
International .................................         123,750(3)(8)             *

David Levy
   President  of the Company and  Director of
the Company ...................................       2,752,373(4)(5)          11.8%

Gregory Catinella
   Director of the Company ....................         736,500                 3.1%

John W. Poling
   Executive Vice President and Chief Financial
Officer of the Company and Director
of the Company ................................         200,000                   *

Marc Gelberg
   Director of the Company ....................           2,500                   *
</TABLE>


                                       51
<PAGE>

<TABLE>
<CAPTION>
                                                                           Percentage of
                                                        Shares              Outstanding
Name and Address of Beneficial Owner(1)            Beneficially Owned    Common Stock Owned
---------------------------------------            ------------------    ------------------
<S>                                                     <C>                     <C>
Rachel Levy
7014 DelCorso Lane
Delray, FL 33446 ..............................       1,300,784(5)(6)           5.6%

Ned Siegel
500 T-Rex Ave., Suite 150
Boca Raton, FL 33431 ..........................       1,655,691                 7.1%

Neil Strum
3849 Rambla Pacifico
Malibu, California 90265 ......................       1,655,691                 7.1%

VLC Holdings, LLC
2455 E. Sunrise Blvd., Suite 502
Ft. Lauderdale, FL 33304 ......................       2,739,373(5)(7)          11.7%

Mitchell Entertainment Company ................       4,000,000(9)             14.6%
11601 Wilshire Blvd., Suite 2400
Los Angeles, CA 90025

Elizabeth Buntrock.............................       3,112,500(10)            11.7%
500 Broward Boulevard
Suite 1950
Ft. Lauderdale, FL 33394

All  executive  officers  and  directors as a
group .........................................       5,677,817                24.3%
</TABLE>

-------------------
* Less than 1%

(1) Unless otherwise indicated, the address of record for the owner is 3200 West
Oakland Park Blvd., Lauderdale Lakes, FL 33311
(2) Held by Solomon  Family  Trust,  dated  December 21, 1989,  14 Beverly Park,
Beverly Hills, CA 90210.
(3) Includes 18,750 shares owned by Cheri Jacobi, Allen Jacobi's wife.
(4) Includes 5,000 shares owned by David Levy,  2,739,373 owned by VCL Holdings,
LLC and 8,000 shares owned by Victoria Levy.  Excludes 1,300,784 shares owned by
Rachel Levy, David Levy's mother.
(5) The aggregate  holdings of David Levy,  Victoria  Levy,  Rachel Levy and VLC
Holdings  total  4,053,157  and represent  approximately  17.3% of the Company's
outstanding common stock.
(6) Excludes shares held by David Levy and Victoria Levy.
(7) The principal owners of VLC Holdings, LLC are the wife and daughter of David
Levy,  the  President  and a director of the  Company.  Excludes  shares held by
Rachel Levy.
(8) Allen  Jacobi  and the  Company  entered  a Mutual  Release  and  Settlement
Agreement  on  December 8, 2004.  Mr.  Jacobi is no longer  affiliated  with the
Company.
(9) Includes  2,000,000  shares  issuable  upon the  conversion of principal and
interest of a  convertible  term note and  2,000,000  shares  issuable  upon the
exercise of a common stock  purchase  warrant.


                                       52
<PAGE>

(10) Includes  2,800,000  shares  issuable upon the  conversion of a convertible
promissory  note owned  directly by Lakes Holding Trust U/A, which is controlled
by Elizabeth Buntrock, and 312,500 shares owned directly by Elizabeth Buntrock.


                                       53
<PAGE>

Item 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

   We, formerly known as Lexington Barron Technologies,  Inc., were incorporated
in the State of Colorado on August 23, 2000. From its inception through April 1,
2004, Lexington Barron Technologies, Inc. conducted no significant operations or
other activities. On March 15, 2004, Lexington Barron Technologies, Inc. entered
into a stock exchange agreement with Pyramid Music Corp., a Florida corporation.
Under the terms of the stock exchange agreement,  Lexington Barron Technologies,
Inc.  acquired  100% of the  outstanding  common stock of Pyramid Music Corp. in
exchange for 16,922,464 shares of common stock of Lexington Barron Technologies,
Inc. As a result of the share exchange,  which was consummated on April 1, 2004,
the former  shareholders of Pyramid Music Corp. owned, on a fully diluted basis,
approximately  80% of the then-issued and outstanding  shares of common stock of
Lexington Barron Technologies, Inc. and the former principal owners of Lexington
Barron  Technologies,  Inc.'s  common  stock  (who are former  directors  of the
company) owned, on a fully diluted basis,  approximately  20% of the then-issued
and outstanding shares of Lexington Barron Technologies, Inc. On March 26, 2004,
Lexington  Barron  Technologies,  Inc.  amended its articles of incorporation to
change its name to "AGU Entertainment Corp."

   In connection  with the share  exchange,  the  then-board of directors of the
Company appointed nominees selected by the former  shareholders of Pyramid Music
Corp. to fill the existing  vacancies on the company's  board of directors.  The
former directors resigned as members of our board of directors.

   Effective  December 8, 2004,  Allen  Jacobi  resigned as President of Pyramid
Records International,  Inc., one of our subsidiaries.  We were not obligated to
make  any  payments  to him  under  the  termination  provisions  of his  former
employment  agreement.  On December 8, 2004, as part of his resignation,  we and
our  subsidiaries  entered into a mutual release and  settlement  agreement with
Allen Jacobi,  Josh Danoff,  Jeff Shane,  Delsy  Gutierrez,  each an employee of
Allen Jacobi,  Pyramid Records Corp., a Florida  corporation,  and Pyramid Media
Group, Inc., referred to herein as the Pyramid Parties.

   Under the terms of the mutual release and settlement  agreement,  the Pyramid
Parties had to deliver all rights to certain  master  recordings  to us, pay all
brokerage  commissions under the license  agreement,  deliver all business files
and computers to us, forfeit all rights to a telephone number and notify parties
to certain  agreements that the Pyramid Parties are no longer  authorized to act
on our behalf. The terms of the mutual release and settlement agreement provided
for us to pay  $11,000  for an  outstanding  legal bill owed by Pyramid  Records
Corp. to a third party,  permit Allen Jacobi to retain $40,000  received under a
license  agreement,  transfer any rights to the existing Stephen Stills contract
to Allen Jacobi, subject to approval by the artist, and relinquish all rights to
an  internet  domain  name.  We were also  entitled  to all future  monies to be
received under the license agreement.

   On July 25, 2003, we received loans from and executed three  promissory notes
totaling $114,400 in favor of DML Marketing Corp., an entity controlled by Donna
M. Levy,  the wife of David C. Levy, in the principal  amount of $59,900 and Ned
Siegel and Neil Strum,  collectively,  in the  principal  amounts of $39,000 and
$15,500.  The  notes  accrue  interest  at an  annual  rate of 5% and  mature on
November 1, 2004. DLM Marketing  agreed to extend the due date on its note until
June 30, 2005. We are seeking a similar extension with Ned Siegel and Neil Strum
however there can be no  assurances  that we will be successful in obtaining one
we may be forced to refinance these notes on terms less favorable to us than the
existing notes.

   In June 2004,  we  received  loans from and  executed  two  promissory  notes
totaling  $235,000 in favor of DML Marketing  Corp.  in the principal  amount of
$150,000,  which  matures on October 30, 2004,  and John P.  Grandinetti  in the
principal amount of $85,000, which matures on October 30, 2004. The notes accrue
interest at an annual rate of 5%. These notes were repaid in December 2004.


                                       54
<PAGE>

   In August  2004 and in October  2004,  we  received  loans from and  executed
promissory notes in the principal amount of $40,000 and $1,000 respectively,  in
favor of DML Marketing  Corp. The notes accrue  interest at an annual rate of 5%
and mature on November 1, 2004. These notes were repaid in December 2004.

   For the period from May 20, 2003  (inception)  through December 31, 2004, the
Company received various computer and internet  services totaling $36,000 from a
stockholder. In June 2004 the entire amount was converted into common stock.

   For the period from May 20, 2003  (inception)  through  December,  2004,  the
Company received various  consulting  services totaling  approximately  $159,000
from a stockholder. At December 31, 2004 approximately $7,000 was unpaid.

   Additionally,  two  officers  of the  Company  agreed to defer a  portion  of
salary,  payable under employment agreements until such time as adequate capital
has been raised by the Company.  The amount deferred as of December 31, 2004 was
approximately $85,000.

   On  March  3,  2004,  in  connection  with  the  Distribution  Agreement  and
assignment  of  certain  assets of PMG (see Note 5),  the  Company  assumed  the
obligation  to  repay  $350,000  of notes  payable  to two  shareholders  of the
Company.  The notes have an annual  interest rate of 8%.  Payments  commenced in
March of 2004,  and the balance due as of September  30, 2004 was  approximately
$331,000.  The terms of these notes  require  monthly  payments of principal and
interest.  The Company has not made the required monthly  principal and interest
payments  since June of 2004, and is currently  negotiating  with the holders to
amend the  payment  terms of the notes,  which  would  include  waivers  for the
required  payments  that were not made.  A former  officer of the  Company is an
owner and controlling shareholder of PMG.

   Prior to his  appointment  as a director  of the Company on November 1, 2004,
Mr.  Gelberg  was paid  approximately  $9,000  in 2004 for  consulting  services
provided to the Company.


                                       55
<PAGE>

Item 13. EXHIBITS AND REPORTS ON FORM 8-K

List of  Exhibits  filed as part of this  report.  The  following  exhibits  are
incorporated   by  reference   herein  or  filed   herewith.   The   warranties,
representations  and  covenants  contained  in the  agreements  listed  below as
exhibits  should  not be  relied  upon by  buyers,  sellers  or  holders  of the
Company's  securities  and are not intended as  warranties,  representations  or
covenants to any  individual or entity except as  specifically  set forth in the
agreements.

      Number      Title
      ------      -----

      2.1*        Share Exchange  Agreement,  dated March 15, 2004,  between the
                  shareholders  of Pyramid Music Corp.,  Pyramid Music Corp. and
                  Lexington Barron Technologies, Inc. (Incorporated by reference
                  to the Registrants Form 8-K filed April 21, 2004, as amended)

      2.2*        Agreement and Plan of Merger,  dated as of September 30, 2004,
                  by  and   between   AGU   Entertainment   Corp.,   a  Colorado
                  corporation,   and  AGU   Entertainment   Corp.,   a  Delaware
                  corporation   (incorporated   herein  by   reference   to  the
                  Registrant's Form 10-QSB filed November 12, 2004)

      3.1*        Articles  of  Incorporation  of  AGU  Entertainment  Corp.,  a
                  Delaware corporation  (incorporated herein by reference to the
                  Registrant's Form 10-QSB filed November 12, 2004)

      3.2*        Bylaws of AGU  Entertainment  Corp.,  a  Delaware  corporation
                  (incorporated  herein by  reference to the  Registrant's  Form
                  10-QSB filed November 12, 2004)

      3.3*        Articles of  Amendment  to Articles  of  Incorporation  of AGU
                  Entertainment Corp.  (incorporated  herein by reference to the
                  Registrant's Form 8-K filed April 21, 2004, as amended)

      3.4*        Specimen  certificate of the common stock of AGU Entertainment
                  Corp., a Delaware company (incorporated herein by reference to
                  the Registrant's Registration Statement on Form SB-2 (File No.
                  333-86244)).

      4.1*        Convertible  Promissory Note dated September 13, 2004, made by
                  AGU  Entertainment  Corp.  in  favor of Galt  Financial  Corp.
                  (incorporated herein by reference to the Registrant's Form 8-K
                  filed September 20, 2004)

      4.2*        Warrant to subscribe for 500,000 shares of common stock of AGU
                  Entertainment  Corp.  issued  to  Galt  Financial  Corporation
                  (incorporated herein by reference to the Registrant's Form 8-K
                  filed September 20, 2004)

      4.3*        Secured  Convertible  Term Note  issued  by AGU  Entertainment
                  Corp.,  The Tube Music  Network,  Inc.,  and  Pyramid  Records
                  International,   Inc.   to  Mitchell   Entertainment   Company
                  (incorporated herein by reference to the Registrant's Form 8-K
                  filed December 29, 2004)

      4.4*        Common  Stock  Purchase  Warrant  of AGU  Entertainment  Corp.
                  issued to Mitchell  Entertainment Company (incorporated herein
                  by reference to the  Registrant's  Form 8-K filed December 29,
                  2004)


                                       56
<PAGE>

      4.5         Promissory Note issued by AGU  Entertainment  Corp. to Charley
                  Zeches,  in her capacity as trustee of Lakes Holding Trust U/A


      10.1*       Employment agreement of David Levy, dated as of April 1, 2004.
                  (incorporated herein by reference to the Registrant's Form 8-K
                  filed April 21, 2004, as amended)

      10.2*       Employment  agreement  of  Michael  Jay  Solomon,  dated as of
                  October  1, 2003.  (incorporated  herein by  reference  to the
                  Registrant's Form 8-K filed April 21, 2004, as amended)

      10.3*       Amendment  to  Employment  Agreement  of Michael Jay  Solomon,
                  dated  as  of  December  1,  2003.   (incorporated  herein  by
                  reference to the  Registrant's  Form 8-K filed April 21, 2004,
                  as amended)

      10.4*       Employment  agreement  of Allen  Jacobi,  dated as of April 1,
                  2004.  (incorporated  herein by reference to the  Registrant's
                  Form 8-K filed April 21, 2004, as amended)

      10.5*       Assignment  and  Assumption  Agreement,  dated  as of March 3,
                  2004,  among  Pyramid  Media  Group,  Inc.,  Allen  Jacobi and
                  Pyramid Records  International , Inc.  (incorporated herein by
                  reference to the  Registrant's  Form 8-K filed April 21, 2004,
                  as amended)

      10.6*       Amendment to Assignment and Assumption Agreement,  dated March
                  8, 2004, by and among Pyramid Media Group,  Inc., Allen Jacobi
                  and Pyramid Records International , Inc.  (incorporated herein
                  by  reference  to the  Registrant's  Form 8-K filed  April 21,
                  2004, as amended)

      10.7*       Corporate Guaranty,  dated March 5, 2004. (incorporated herein
                  by  reference  to the  Registrant's  Form 8-K filed  April 21,
                  2004, as amended)

      10.8*       Employment  Agreement  of  Les  Garland,   dated  July  2003..
                  (incorporated herein by reference to the Registrant's Form 8-K
                  filed April 21, 2004, as amended)

      10.9*       Agreement  with  GSMB  regarding   marketing  and  promotional
                  expenditure  commitment  (incorporated  herein by reference to
                  the Registrant's Form 10-QSB filed August 20, 2004)

      10.10*      Trust   Agreement  in   connection   with  the  marketing  and
                  promotional  expenditure  commitment  (incorporated  herein by
                  reference  to the  Registrant's  Form 10-QSB  filed August 20,
                  2004)

      10.11*      Agreement with Radical  Media,  Inc.  (incorporated  herein by
                  reference  to the  Registrant's  Form 10-QSB  filed August 20,
                  2004)

      10.12*      Agreement for Purchase and Sale, dated,  dated as of September
                  10, 2004, by and between AGU  Entertainment  Corp. and Charley
                  Zeches,  in her capacity as trustee of Lakes Holding Trust U/A
                  dated July 27, 2001  (incorporated  herein by reference to the
                  Registrant's Form 8-K filed September 20, 2004)


                                       57
<PAGE>

      10.13*      Consulting  Agreement,  dated as of September 13, 2004, by and
                  between   AGU   Entertainment    Corp.   and   Kevin   Waltzer
                  (incorporated herein by reference to the Registrant's Form 8-K
                  filed September 20, 2004)

      10.14*      Employment  Agreement dated as of November 1, 2004 between AGU
                  Entertainment Corp. and John W. Poling (incorporated herein by
                  reference to the Registrant's Form 8-K filed November 9, 2004)

      10.15*      Stock Purchase  Agreement between AGU Entertainment  Corp. and
                  AUW,   Inc.   (incorporated   herein  by   reference   to  the
                  Registrant's Form 10-QSB filed November 12, 2004)

      10.16*      2004  Stock  Option  and Stock  Incentive  Plan  (incorporated
                  herein by  reference  to the  Registrant's  Form 10-QSB  filed
                  November 12, 2004)

      10.17*      Amendment to Agreement for Purchase and Sale, dated,  dated as
                  of September 10, 2004, by and between AGU Entertainment  Corp.
                  and  Charley  Zeches,  in her  capacity  as  trustee  of Lakes
                  Holding Trust U/A dated July 27, 2001 (incorporated  herein by
                  reference to the Registrant's  Form 10- QSB filed November 12,
                  2004)

      10.18*      Securities  Purchase  Agreement,  effective as of December 20,
                  2004,  by and among AGU  Entertainment  Corp.,  The Tube Music
                  Network,  Inc.  and Pyramid  Records  International,  Inc. and
                  Mitchell   Entertainment   Company   (incorporated  herein  by
                  reference  to the  Registrant's  Form 8-K filed  December  29,
                  2004)

      10.19*      Mortgage Deed and Security Agreement, effective as of December
                  20, 2004, by and between AGU Entertainment  Corp. and Mitchell
                  Entertainment Company (incorporated herein by reference to the
                  Registrant's Form 8-K filed December 29, 2004)

      10.20*      Master Security Agreement,  effective as of December 20, 2004,
                  by and among AGU Entertainment  Corp., The Tube Music Network,
                  Inc.  and Pyramid  Records  International,  Inc.  and Mitchell
                  Entertainment Company (incorporated herein by reference to the
                  Registrant's Form 8-K filed December 29, 2004)

      10.21*      Assignment  of Rents,  Leases and  Deposits,  effective  as of
                  December 20, 2004, by and between AGU Entertainment  Corp. and
                  Mitchell   Entertainment   Company   (incorporated  herein  by
                  reference  to the  Registrant's  Form 8-K filed  December  29,
                  2004)

      10.21*      Subordination Agreement, effective as of December 20, 2004, by
                  and  between  Charley  Zeches,  in her  capacity as trustee of
                  Lakes Holding Trust, and Mitchell  Entertainment  Company,  as
                  agreed to,  accepted  and  acknowledged  by AGU  Entertainment
                  Corp.  (incorporated  herein by reference to the  Registrant's
                  Form 8-K filed December 29, 2004)

      10.22*      Registration  Rights  Agreement,  effective as of December 20,
                  2004,  by and between AGU  Entertainment  Corp.  and  Mitchell
                  Entertainment Company (incorporated herein by reference to the
                  Registrant's Form 8-K filed December 29, 2004)

      10.23*      Environmental  Indemnity  Agreement,  effective as of December
                  20, 2004, by and among AGU Entertainment Corp., The Tube Music
                  Network,  Inc.  and Pyramid  Records  International,  Inc. and


                                       58
<PAGE>

                  Mitchell   Entertainment   Company   (incorporated  herein  by
                  reference  to the  Registrant's  Form 8-K filed  December  29,
                  2004)

      10.24*      Mortgage Deed and Security Agreement, effective as of December
                  20, 2004, by and between AGU  Entertainment  Corp. and Charley
                  Zeches,  in her capacity as Trustee of Lakes Holding Trust U/A
                  (incorporated herein by reference to the Registrant's Form 8-K
                  filed December 29, 2004)

      10.25*      Assignment  of Rents,  Leases and  Deposits,  effective  as of
                  December 20, 2004, by and between AGU Entertainment  Corp. and
                  Charley  Zeches,  in her capacity as Trustee of Lakes  Holding
                  Trust   U/A   (incorporated   herein  by   reference   to  the
                  Registrant's Form 8-K filed December 29, 2004)

      10.26*      Amendment No. 2 to Agreement  for Purchase and Sale,  dated as
                  of November 30, 2004, by and between AGU  Entertainment  Corp.
                  and  Charley  Zeches,  in her  capacity  as  Trustee  of Lakes
                  Holding  Trust U/A  (incorporated  herein by  reference to the
                  Registrant's Form 8-K filed December 29, 2004)

      10.27       Stock Purchase  Agreement between AGU Entertainment  Corp. and
                  Elizabeth Buntrock.

      10.28       Mutual Release and Settlement  Agreement between Allen Jacobi,
                  Josh Danoff,  Jeff Shane,  Delsey  Gutierrez,  Pyramid Records
                  Corp and Pyramid  Media Group,  and AGU  Entertainment  Corp.,
                  Pyramid Records International and The Tube Music Network.

      10.29       Term  Sheet  between  AGU  Entertainment  Corp.  and  Mitchell
                  Entertainment Company.

      10.30       Manufacturing  and  Sub-Distribution   Agreement  between  AGU
                  Entertainment Corp. and Sanctuary Records Group Inc.

      14.1*       Code of Ethics, as amended  (incorporated  herein by reference
                  to the Registrant's Form 8-K filed August 23, 2004)

      16.1*       Letter regarding Change in Certifying Accountant (incorporated
                  herein by reference to the Registrant's  Form 8-K/A filed June
                  15, 2004)

      21.1        List of Subsidiaries

      31.1        Certification  of Chief Executive  Officer pursuant to Section
                  302 of the Sarbanes-Oxley Act.

      31.2        Certification  of Chief Financial  Officer pursuant to Section
                  302 of the Sarbanes-Oxley Act.

      32.1        Section 906 Certification

      ----------------
      * Previously filed.


                                       59
<PAGE>

Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

   Audit  Fees.  The  aggregate  fees billed by  Weinberg & Company,  P.A.,  for
professional  services  rendered for the audit of the Company's annual financial
statements  for the fiscal  year ended  December  31, 2003 and the review of the
financial  statements included in the Company's Forms 10-Q for fiscal years 2004
totaled $ 32,178.

   Audit-Related Fees. The aggregate fees billed by Weinberg & Company, P.A. for
assurance and related services that are reasonably related to the performance of
the audit or review of the Company's  financial  statements  for the fiscal year
ended  December 31, 2004 and that are not disclosed in the  paragraph  captioned
"Audit Fees" above, were $26,081.  The services performed by Weinberg & Company,
P.A., in  connection  with these fees  consisted  primarily of review of our SEC
filings.

   Tax Fees.  The  aggregate  fees  billed by  Weinberg  &  Company,  P.A.,  for
professional services rendered for tax compliance,  tax advice, and tax planning
for the fiscal year ended December 31, 2003 were $ 4,389. The services performed
by  Weinberg & Company,  P.A.,  in  connection  with  these  fees  consisted  of
preparing the Company's 2003 federal and state tax returns.

   During the fiscal year ended December 31, 2004, all services performed by the
independent  accountants were pre-approved pursuant to the pre-approval policies
of our audit committee.

   For the twelve months ended December 31, 2003, the Company paid audit fees to
its independent certified public accountants,  Cordovano and Honeck, P.C, in the
amount of  $3,500.  Tax and  other  professional  fees  paid to the  independent
certified public accountants in 2003 were not significant.


                                       60
<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, on March 31, 2005.

                              AGU ENTERTAINMENT CORP.

                              By:    /s/ David C. Levy
                                     ----------------------------------
                                     David C. Levy
                                     President and Chief Executive Officer, and
                                     Director


   In accordance with the requirements of the Exchange Act, this report has been
signed below by the  following  persons on behalf of the  registrant  and in the
capacities indicated on March 31, 2005.

By:  /s/ David C. Levy
     -----------------
David C. Levy
Director, President and Chief Executive Officer

By /s/John W. Poling
--------------------
John W. Poling
Director and Chief Financial Officer
(principal financial officer and principal accounting officer)

By:  /s/Michael Jay Solomon
---------------------------
Michael Jay Solomon
Chairman of the Board of Directors

By: /s/Les Garland
------------------
Les Garland
Director

By: /s/Gregory R. Catinella
---------------------------
Gregory R. Catinella
Director


By /s/Marc Gelberg
------------------
Marc Gelberg
Director


                                       61
<PAGE>

EXHIBIT 21.1

List of Subsidiaries

   1. The Tube Music Network, Inc.

   2. AGU Music, Inc.

   3. AGU Studios, Inc.

   4. 3200 Oakland Park, Inc.


                                       62