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                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

 Annual Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934,
                  for the fiscal year ended December 31, 2001.

                         Commission file number 0-30661

                             MILLENNIUM DIRECT, INC.
                         (Name of Small Business Issuer)

             State or Other Jurisdiction of Incorporation: Delaware

                   IRS Employer Identification No.: 06-1579927


       270  Larch  Lane,  Mahwah,  New  Jersey                        07430
                  (Address of Principal Executive Offices)          (Zip Code)

                                 (201) 379-7661
                 (Issuer's Telephone Number, Including Area Code)

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

Securities  registered  under  Section  12(g) of the Exchange Act:  Common Stock


                                                   Name  of  Each  Exchange
          Title  of  Each  Class                    on  Which  Registered
          ----------------------                    ---------------------

          Common  Stock,                                None
          par  value  $.0001

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. [X] Yes [ ] 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.  [  ]

Issuer's  revenues  for  its  most  recent  fiscal  year  were:  $20,620.

As  of  October 3, 2002, the aggregate market value of the voting and non-voting
common equity held by non-affiliates computed by reference to the price at which
the  common  equity  was  sold  is  $18,356.

The number of shares outstanding of the Company's common stock, as of October 3,
2002  is  23,974,714.

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                                     PART I

                             DESCRIPTION OF BUSINESS

     We  were incorporated in the State of Delaware on September 13, 1994 as Kid
Rom,  Inc.  ("KRI").  KRI  initially  developed,  produced  and  distributed
entertaining  and  educational  videos  for  the  toddler,  children and teenage
markets.  In  February  1998,  KRI  acquired UltraDerma, Ltd. ("UDL"), a company
which  develops,  markets  and  distributes  skin care products. On November 18,
1999,  KRI  changed  its  name  from  Kid  Rom,  Inc. to Millennium Direct, Inc.
Millennium's  corporate office is located at 270 Larch Lane, Mahwah, N.J. 07430.

     We  currently operate two divisions: 1) skin care products (the business of
UDL  acquired  on  February 1, 1998); and 2) entertaining and educational videos
(KRI's  business  since  incorporation).

     Skin  care  products
     --------------------

     Our TheraCel pro-cellular formula product is designed to hydrate skin cells
and  eliminate  the appearance of wrinkles and other signs of aging. Pursuant to
an  agreement  with  the  manufacturer  of  the  pro-cellular  formula,  we have
exclusive  licensing  rights  to  market,  distribute  and sell our pro-cellular
formula  in  North  America  and  the  exclusive  world wide right to market our
product  under  the TheraCel brand name to the rest of the world. TheraCel is an
all natural product that does not use any acid-based ingredients or any invasive
procedures.  The  initial  agreement  granting us the rights to the pro-cellular
formula  was  for a five (5) year term and expired May 1, 2002. On May 14, 2002,
the  parties entered into an extension of this agreement for an additional three
(3)  year  period.

     Along  with  the  pro-cellular  formula,  we  currently  market:  (i) a day
moisturizer,  (ii) a night moisturizer, (iii) a soap, and (iv) a moisturizer for
dry  or  damaged skin.  These five products consist of what we call the TheraCel
Skincare  System.  In addition to these TheraCel brand products, we own a patent
on  a  pillow  and  a  related  pillow case designed to help minimize the facial
wrinkles  some women experience after a night of sleep.  This pillow is marketed
under  the  name  "The  Anti-Wrinkle  Pillow."

     We contract with outside sources for the manufacturing, bottling, packaging
and  distribution  of  our  skin  care  products.  We  are  not dependent on any
particular  manufacturer,  bottler, or packager for our products. Except for the
pro-cellular  formula,  all  products  are  manufactured  and  bottled  to  our
specifications  and  formulas  and  can  be  manufactured and bottled by several
manufacturers  and  bottlers. The pro-cellular formula has been manufactured for
us  by  a  French  laboratory  and  bottled  for  us  in  Canada; however we are
considering  having  the formula bottled in the United States in connection with
our  anticipated  upcoming  marketing  campaign. If any of our suppliers were to
decide  not  to  provide  us  with  product or bottling, for whatever reason, we
believe  we  could  replace  them  without any significant interference with our
cosmetic  business.

     We market these products exclusively through direct response television. By

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direct  response  television method of distribution (or infomercial) we mean the
selling  and  marketing  of  product  directly to the consumer through 30-minute
advertisements  in  which  the  consumer  is  requested  to purchase the product
directly  by  responding  to  a telephone number, address or web site advertised
during the commercial.  This is in contrast to regular television advertisements
where  the consumer is urged to purchase the product through retail outlets.  We
believe  companies  may  elect  the  direct  response  television  method  of
distribution  for  a  number  of  reasons.  Among  them  are:

    -it  is  an  effective  medium  to  tap  into  impulse  buying;
    -generally,  it  is  less  expensive  to  launch  a  new  product;
    -it  may  lay  the  foundation  for  a  successful retail campaign after the
     product  gains  name  recognition;
    -through media testing, one may assess the likelihood of potential sales;
    -the  return  on  product  investment  may  be  faster;  and
    -one  may  gain  a  direct  list  of customers to whom other products may be
     marketed.

     Our target market for our skin care products is primarily women between the
ages  of  28  and  55.

     We  centralize  the administration of our management, production, sales and
marketing  divisions  for  both the videos and the skin care products all within
our  corporate entity. Financial information concerning production, development,
sales,  marketing,  operating  costs  and  other  expenses  are  maintained  in
accordance  with  generally  accepted  accounting  principles, but not allocated
according  to  specific  product.

          New  Products

     We  have  developed,  but  have  not  yet  begun to distribute, an extended
skincare  line  that  includes adult and teenage acne formulations. We have also
created  a  new  line  of  cosmetics to compliment the TheraCel Skincare System.
These  new  products  include:

-    TheraCel  PRO  SV  -  This  is  an  adult acne and blemish formulation that
     contains  sulfur  and  vitamins.  We  believe  it  is  more  gentle  than
     formulations  currently available for teenagers , and may apply to the
     adult market.

-    TheraCel  PRO  Tac  -  This  is  an  acne  and blemish formulation designed
     spefically  to  target  the teenage market. This formulation contains alpha
     hydroxy  acid  and  salicylic  acid  which  is widely used for the care and
     treatment  of  acne.

-    TheraCel  PRO Sun - This is a non-oily Sun Protection Factor ("SPF") 15
     sunblock for men and women of all  ages  for  use  on  their face and body.

-    TheraCel PRO Sun Foundation - This is a non-oily powder foundation with sun
     protection for skin. Originally designed to be used in conjunction with the
     TheraCel  pro-cellular  formula, this product is designed to be marketed to
     women  as  a  sun  block  compatible  with  their  every-day  makeup.

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-    TheraCel  Active  Mask  -  This  is  a  clear,  quick  drying  mask  with a
     homeopathic  remedy for aging skin. We believe that application of the mask
     three  times  a  week on problematic skin will reduce puffiness and tighten
     the  skin  surrounding  the  jawline.

-    TheraCel PRO SV Pads - This is an adult and teen acne and blemish cleansing
     formulation  in  a  convenient  throw-away  cotton pad - containing all the
     ingredients  that  are  also  contained  in  TheraCel  PRO  SV.

     Additional  new  products  include  TheraCel  PRO  Sun  Blusher,  TheraCel
Waterproof  Lipliners, TheraCel Lipstick, TheraCel Healthy Lips and TheraCel Eye
Shadows. We intend to market these products either in conjunction with TheraCel,
by  way  of individual infomercials or through sales representatives nationwide.
We  have  not registered any trademarks in connection with these products and no
assurances  can  be  given  that one would be available. We believe that we have
common  law  trademark  rights  based  on what we believe to be first use but no
assurance  can be given that we have such rights. No assurance can be given that
we  will  be  able  to  successfully  market  any  or all of these new products.
Marketing new products requires significant financial resources and no assurance
can be given that we will be able to generate the funds required from operations
or  from  additional  financing  sources.


     Acquisition  of  Ultraderma,  Ltd.

     In  February  1998, we acquired substantially all of the assets of UDL (the
"UDL  Acquisition"), for a total purchase price of $1,216,750. The consideration
consisted of $400,000 in cash and the issuance of 3,025,000  shares of
our  common  stock,  valued  at $816,750,  to Ardis Balis (formerly Ardis Boyd),
which  transaction  was exempt from registration pursuant to Section 4(2) of the
Securities  Act.  Concurrent  with  the  UDL  Acquisition,  we executed a letter
agreement  which  granted  to  Ardis  Balis, the Chairperson and Founder of UDL,
anti-dilution  rights  pursuant  to  which  we  agreed  to  maintain Mrs. Balis'
interest  in  Millennium, at not less than fifty-one percent (51%) of the issued
and  outstanding common stock pending completion of a registered public offering
of our securities. For purposes of such calculation, we are permitted to include
shares  of  common  stock held by George Balis, our Chairman and Chief Executive
Officer  and  the  husband  of  Ardis  Balis.

     In  addition  to  other shares issued to Ardis Balis in accordance with the
anti-dilution agreement executed concurrent with the UDL Acquisition, in June of
2000 and in January of 2001, we issued 1,923,000 and 4,952,334 restricted shares
of  our  common stock respectively to Mrs. Balis. Mrs. Balis was not granted any
registration  rights  with  respect  to  these  shares.

          Substantial  Third  Party  Agreement;  Sales  and  Marketing

     In  September  1999,  we  terminated  a  sales and marketing agreement with
Wellquest  International,  Inc.,  a  New  York  based  company  (the  "Previous
Marketer").  Although  the  Previous Marketer successfully launched the TheraCel

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product  line through a direct response television campaign, it was not prepared
to  handle the immediate large volume of sales generated by the infomercial. The
Previous  Marketer  sought to improve its fulfillment, customer service and call
center  abilities  by  decreasing  its  media  purchases, as it too realized its
facilities  in  these  areas were not working effectively. We were not satisfied
with the changes the Previous Marketer made to cure these problems. In addition,
we believe that the Previous Marketer failed to provide payments, statements and
reports  as  required  under  our  agreement, misrepresented the capabilities of
their  call  and  fulfillment  centers, failed to provide adequate facilities to
support product sales, failed to meet sales quotas under our agreement, and sent
orders  to  the  incorrect customers and failed to send re-orders to the correct
customers,  which  resulted  in  lost  sales  from the customers who had ordered
products,  but  failed  to  receive  them.  As  a  result  of  the foregoing, we
terminated  our  agreement  with  the  Previous  Marketer. In June 2000, we also
terminated  a  separate licensing agreement we had with the Previous Marketer to
assist  us  in distributing our educational videos. We paid $59,000, in the form
of  200,000  shares of Common Stock, to terminate such agreements. Other than as
set  forth  above, neither us nor the Previous Marketer have any further rights,
liabilities  or  obligations  under  our  agreement.

     On  November  3,  1999, we entered into a Production Services and Marketing
Agreement  with  Hawthorne  Direct,  Inc.  ("Hawthorne"). This agreement expired
pursuant  to  its  terms  in  July 2001. However, Hawthorne continued to operate
under  this agreement as we discussed a new arrangement. In May 2002, we decided
to  end  the  discussions  with  Hawthorne  and  entered  into  a new Production
Services,  Marketing  Services  and  Distribution  Agreement  (the  "Production
Agreement")  with  Impact  Product  Development, Inc. ("Impact"). Neither us nor
Hawthorne  have  any  remaining  rights, liabilities or obligations to the other
under  the  terms  of  the  expired  agreement.

     Under  the  Production  Agreement with Impact, we expect to sell all of our
skin  care  products  directly  to  consumers through direct response television
advertising.  The  Production  Agreement grants Impact, subject to our approval,
the  exclusive  rights  to  market  and  distribute our skin care products for a
period  of  one  year  following  the  date  of  the initial media test of a new
infomercial.  The  new  infomercial  features Ms. Sarah Purcell as the host. The
initial  media  test  has not yet been conducted. We anticipate that the initial
media  test  of  the new infomercial will be conducted in November / December of
2002.

     The Production Agreement is automatically renewable for one year periods in
the  event  that  minimum  levels of sales are generated by Impact (i.e., 75,000
product units in year one, 100,000 product units in year two and 150,000 product
units  per  year  thereafter).  A  product  unit  consists  of the five TheraCel
products:  (1)  the  pro-cellular  formula;  (2)  day  moisturizer;  (3)  night
moisturizer;  (4)  TheraCel  soap; and (5) moisturizer for dry and damaged skin.
If  such sales levels are not met in any given year, the Production Agreement is
automatically  terminated  without  penalty  to  either  party.

     Pursuant  to  the  Production  Agreement,  Impact, among other things, has
produced  a  new  broadcast  quality  direct  response  television  commercial
("Infomercial")  for our skin care products.  Under the Production Agreement, we
are  required  to pay for the Infomercial production costs and media test costs.
Impact  has  agreed  to  advance  us  the  funds  necessary to pay for the costs
associated  with  the  production,  distribution  and  marketing of the TheraCel

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product.  Impact  will  be reimbursed for these payments from a merchant account
into which all revenues earned and received from the sale of the product will be
deposited.  We  will make disbursements from the merchant account to pay for any
costs  associated with marketing and selling the TheraCel products including but
not  limited  to  production  costs,  media  costs, telemarketing and fulfilment
costs,  operating  expenses and any fees or commissions owed to Impact. Once the
direct  response  television  campaign  is  launched,  costs  are  estimated  to
approximately  $1  million  per month during an active campaign depending on the
cost  of  advertising.

     Under  the  terms  of the Production Agreement, the balance of the merchant
account after expenses, fees and other costs are deducted will be distributed by
us  as  follows: forty-seven and one-half (47.5%) percent to us, forty-seven and
one-half  (47.5%)  percent  to  Impact  and  five  (5%)  percent  to Infomercial
Marketing  Partners,  LLP,  the  company  working  with  Impact  to  create  the
Infomercial.  In  addition,  we  have  agreed  to issue one million five hundred
thousand  (1,500,000)  restricted  shares  of  our  common  stock  to  Impact as
additional  compensation  under  the  Production  Agreement.

     Once  a  consumer  has  purchased  our products, we seek to sell him or her
additional  products  that  might  be  of  interest.  Through  flyers  and other
promotional  mailings,  consumers  are urged to re-order our products once their
current  supply has been exhausted. Alternatively, consumers can elect to enroll
in  programs  which  automatically  charge  their  credit  cards  and  we  send
replenishment  supplies  at  requested  intervals.

     We will use the services of a fulfillment center, and others, to facilitate
shipping  of  our  products  to our customers. A fulfillment center will receive
orders  for  our  skin  care  products  via  our direct response advertising and
transmits  these  orders  to  the appropriate contractor. These contractors each
have  facilities  which  we  use  to  package, store and ship the products. This
eliminates the need for us to undertake the administrative burden of maintaining
large  scale  warehouse  and  other  fulfillment  services.  We  believe that by
concentrating  our  efforts  on developing and marketing our brands and on sales
and  merchandising, rather than operating a warehouse, we will achieve a greater
rate  of  growth  without any diminution in services to our customers. We do not
currently  have any agreements with a fulfillment center. As our business grows,
we  will  continually  examine  the  costs  and  benefits  of  operating our own
fulfillment  center.

     Our  skin  care  products  can  be  made  and  packaged  relatively easily,
therefore eliminating the need for substantial product inventory.   Inventory is
only required to be kept on hand during an active marketing campaign.  During an
active  marketing campaign, we anticipate that we would have to maintain a 5,000
to  10,000  unit  supply  of  TheraCel  products  for each month the campaign is
active.  The amount Impact would need to advance for a one month supply would be
approximately  $65,000  to $130,000, depending on the then cost of goods and the
projected  volume of sales.  We do not incur any significant costs that would be
traditionally  referred  to  as Research-Development ("R&D").  The existing skin
care  products have been repackaged and other cosmetic changes have taken place.
There  have  been  no  changes  to the basic product formulas, and therefore, no
significant  costs  for  R&D.

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     The  absence of sales of the TheraCel product line in the year 2000 and the
low  level  of sales for such product line in 2001 resulted from the termination
of  our  relationship with the Previous Marketer and Hawthorne and entering into
the new Production Agreement.  We will continue to promote the "TheraCel" brand,
and  other  skin  care  products, by seeking to demonstrate the ease, safety and
effectiveness  of  these  products.

     In May 2002, Impact entered into a contract with Win-Win Productions, Inc.,
("Win-Win")  whereby  Win-Win  agreed  that  Ms. Sarah Purcell, the President of
Win-Win,  will  appear  in our infomercials as well as on our packages and other
related  materials for TheraCel.  The agreement is for a term of three years and
Win-Win  will  receive  one  (1%) percent of the gross sales based on the retail
price  on the gross orders of TheraCel in response to the marketing campaign and
one  (1%)  percent  of all other sales based on the wholesale price of TheraCel.
Sarah  Purcell  is  best  known as a co-host of "Real People" which aired on NBC
from  1979-84 and the "Home Show" which aired for two years on ABC. She was also
a  spokesperson  for  MURAD,  a  skin care product successfully marketed through
direct  response  television.

     Government  Regulation

     The United  States Food,  Drug and Cosmetic Act and the Fair  Packaging and
Labeling  Act  regulate  the purity  and  packaging  of health  and beauty  aids
products and fragrances and cosmetic products. Similar statutes are in effect in
various  states.  Manufacturers  and  distributors  of health  and  beauty  aids
products are also subject to the  jurisdiction  of the Federal Trade  Commission
with respect to matters such as advertising  content and other trade  practices.
To  our  knowledge,  the  products  we distribute are produced by  manufacturers
who  comply  with  these  regulations  and  who  periodically  submit  their
products  to  independent laboratories for testing.  However, the failure by our
manufacturers  or  suppliers  to comply with applicable  government  regulations
could  result  in  product  recalls  that  could  adversely  affect  our
relationships   with  our  customers.  In  addition,  the  extent of potentially
adverse  government  regulations  which might arise from future  legislation  or
administrative  action  cannot  be  predicted.

     Educational  Videos
     -------------------

     We attempt to make our videos both entertaining and educational. All videos
developed by us have five characteristics which we believe will distinguish them
from  our  competition:

     (i)      a form of animated transportation vehicle
     or  construction  equipment;

     (ii)     children interacting with animated and live
     equipment  and  asking  questions  regarding  how  the  equipment
     works  or  operates;

     (iii)    original music and narrative soundtracks;

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     (iv)     demonstration of a theme or moral that we believe is
              worthy  of  instilling  in  children;  and

     (v)      no violence.

     We have completed two videos in our "I Wonder"  series, "Toby the Tugboat"
and "Brett the Jet."  Our "I Wonder"  series is dedicated to bringing real life
experiences  to  children  with animation, music, song, and a story which can be
enjoyed  by  both children and parents. Although we have not formally registered
the  "I  Wonder"  label, we believe we have trademark rights to the name due to
its exclusive use by us in the public domain for several years.  In addition, we
believe that the existence or non-existence of these rights are unrelated to the
success or failure of our business. The videos are approximately 30 minutes each
and  can  be  adapted  for  sale  or syndication in foreign markets. We are also
seeking  to  develop  additional  videos  and  several  weekly  combination live
action/animated  shows aimed at the teenage market. In developing our videos and
weekly  shows,  we  attempt  to  create characters with cross-over merchandising
appeal  into  areas  such  as  clothing,  board games, interactive CD-ROM games,
books,  toys,  dolls  and  video  games.  We  have not sold, but intend to sell,
clothing,  board games, interactive CD-ROM games and other products based on our
characters.  We  believe  our characters in our videos "Brett the Jet" and "Toby
the  Tugboat"(and  our  other  video  characters)  should  have  such cross-over
merchandising  appeal.  As  our videos continue to receive favorable reviews and
recognition at video festivals, and consumer awareness increases, we believe the
opportunity  to achieve cross-over merchandising also increases. This cross-over
merchandising  may  be initiated by us, as well as by third party marketers, who
may  approach  us.

     In  addition  to  our  "Toby  the  Tugboat"  and "Brett the Jet" videos, we
currently have four additional videos in development which also feature the five
characteristics  incorporated in our completed videos. These videos are: 1) "Rob
The Racing Car"; 2) "Benjamin The Fire Engine"; 3) "Flip The Ship"; and 4) "Jane
The  Crane."

     We  contract  on  a  case-by-case  basis  with  various writers, animators,
directors, producers, musicians and post-production staff to complete the videos
and  prepare  them  for  videotape  release.  We  use  the  service  of writers,
animators, directors and other individuals and companies to obtain services on a
"fixed  fee  basis,"  which  requires service to completion at a fixed amount of
compensation,  regardless  of  time  devoted to the project, and at other times,
fees  are paid  based on an hourly rate.  Fees for services may include cash and
stock  or  one  or  the other, as the case may be,  negotiated on a case by case
basis.  We  are  not  dependent  on any particular writer, animator, director or
other  individuals  or companies other than the services of George S. Balis, our
Chairman  and  producer  of  the  Kid  Rom  videos.

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     We  are  currently marketing our videos through general video distributors,
and  specialists in the toddler and children's markets. Among these distributors
are:  Library  Video  Company,  Tapeworm  Video  Distributors, Inc., Amazon.com,
Canadian  Video  Services,  Midwest Tape, Follett Audiovisual Resources, Baker &
Taylor Entertainment, Quality Books, Inc. (a Dawson Company), Unique Books, Inc.
and Instructional Video.  Pursuant to these distribution agreements we agreed to
supply  these  distributors  with  our  videos at an agreed upon discount to the
suggested  retail  price  and  these distributors agreed to offer our videos for
sale  to  retail  outlets, libraries, educational facilities and other customers
with  whom  they  have  relationships.  None  of  these  agreements  require the
distributor  to  purchase  or  distribute a minimum number of videos.  We supply
copies  to  these  distributors  as  they  need  them  to fill orders and we are
responsible  for  all  shipping  and  freight  charges.  These  agreements  are
terminable,  without  penalty, by either party upon notice.   Millennium is also
independently  seeking  to  distribute its videos through video and retail store
chains.

     Our  marketing  strategy  regarding  our  educational  videos is to further
enhance  the  image  and  awareness  of  our  videos  by producing entertaining,
educational  and  non-violent characters and stories and to working closely with
our  distributors  to  bring  our videos to market.  We have not initiated print
advertising  at  this  time.

     Currently,  we  undertake  all  costs  and  obligations with respect to the
packaging,  warehousing,  shipping and distribution expenses for the educational
videos.  In  addition,  we  carefully  monitor  the  output of our producers and
contractors  to  ensure they produce videos consistent with our brand and image.
All  contractors  and  vendors,  including  video  producers and post-production
staff,  are  carefully  supervised  by  us.

     Historically,  we  have not regularly maintained inventory of our videos in
any  material  amount.  Once  fully  produced  and  ready  for  distribution,  a
significant  number of videos can be produced in a short period of time, through
the  services  of  our  outside  video  duplicators,  eliminating  the  need  to
anticipate  significant  sales.

     Costs  incurred in the development of new video projects are capitalized as
incurred.  Such costs are then amortized upon the completion of the project.  We
estimate  that the four additional videos will cost approximately $400,000.  The
weekly  live/animated  shows  are  estimated to cost $200,000 per pilot program.

     Expansion  Strategy
     -------------------

     We believe that we can successfully build on our existing customer base and

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marketing,  packaging  and shipping relationships and expand our market share in
both  the  educational  video  and  skin care markets.  We have no plans to open
additional  offices,  but  could enter into additional distribution arrangements
and/or  licensing  arrangements  as  business  warrants.  We may also expand the
number  of  suppliers  and manufacturers we contract with if there is a surge in
demand  for  our  product  line.  There  can  be  no  assurance  that we will be
successful  in  any  of  these  efforts.

     Employees
     ---------

     As  of  October  3,  2002,  we  employed  two  individuals  who  operate in
executive,  administrative,  sales, marketing and production capacities. None of
our  employees  are  represented  by  a  labor  organization and we consider our
relationship  with  our  employees  to  be  excellent.

     Competition
     -----------

     There  are many companies that offer similar or competitive products to the
products produced by us. Both the educational video and skin care industries are
occupied  by  some  of  the  largest,  most  well-known  companies in the world,
including  Disney,  Time-Warner,  Revlon, Estee Lauder, Scimitar and Anchor Bay.
Despite  this  substantial  and intense competition against foreign and domestic
competitors  with  substantially greater resources and distribution capabilities
than  us,  we  seek  to distinguish ourselves in specialized niches within these
industries  by  attempting  to  offer  unique  stories  and  characters  for our
educational  videos  and  by  seeking  to  develop unique skin care products not
offered  by  our  larger  competitors.


                             DESCRIPTION OF PROPERTY

        We  lease  property  for use as our executive offices at 270 Larch Lane,
Mahwah,  New  Jersey,  07430,  from Ardis Balis, the President and a director of
Millennium,  at  a rate of $2,000 per month. The Company currently has no policy
with  respect  to investments or interests in real estate, real estate mortgages
or  securities  of,  or  interests  in, persons primarily engaged in real estate
activities.
                                LEGAL PROCEEDINGS

        Millennium is not a party to or involved in any material litigation, nor
is  it  aware,  to  the  best  of  its knowledge, of any pending or contemplated
proceedings  against  it  by  any  third  party  or  any government authorities.

               SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     During  the fourth quarter of calendar year 2001, no matters were submitted
to  a  vote  of  the  security  holders  of  the  Company.

                                       10
<PAGE>
                                    PART II.

            MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     Our  common  stock  is presently trading on the National Quotation Bureau's
OTC  "pink  sheets"  under  the  symbol  MMLD. As of October 3, 2002, there were
approximately  313  holders  of  our  common  stock.

     The  following  table  sets forth the range of the high and low closing bid
prices  per  share  of  our  common  stock  during each of the calendar quarters
identified  below.  These  bid prices were obtained from the pink sheets, and do
not  necessarily  reflect  actual  transactions,  retail  markups,  markdowns or
commissions.

     The  high  and  low bid sales prices for the equity for each full quarterly
period within the two most recent fiscal years and any subsequent interim period
for  which  financial  statements  are  included  are  as  follows:

--------------------------------------------------------------------------------
Year  Quarter   High Bid  Low Bid Year   Quarter   High Bid  Low Bid
2000      1st       .25     0.05  2001      1st       .32     0.15
2000      2nd      .125     .125  2001      2nd       .15     0.05
2000      3rd       .25    .0625  2001      3rd       .05     0.05
2000      4th       .29     0.25  2001      4th       .05    0.005

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



     We  have  not  paid  any  cash  dividends  to date and do not anticipate or
contemplate  paying  dividends  in  the  foreseeable  future.  It is the present
intention  of  management  to utilize all available funds for the development of
Millennium's  business.

Recent  Sales  of  Unregistered  Securities

     In  January 2001, prior to the 2 for 1 forward split of Millennium's common
stock,  Dan  Gorczycki, Louis Tallarini, John Rissi and George Balis were issued
75,000,  75,000,  375,000  and  75,000  shares  of  common stock respectively as
compensation  for  serving on the Board of Directors. 150,334 shares were issued
to  certain  consultants valued at $.10 per share in consideration for marketing
and  computer  internet  and  web-site  consulting  services rendered. 4,952,334
shares  of  common  stock  were  issued to Ardis Balis at par value ( $.0001 per
share)  to  be  in  compliance  with  the  terms  of the anti-dilution agreement
executed  concurrent  with  the  UDL  acquisition  agreement.  All  of  these
transactions  were  exempt  from  registration  pursuant  to Section 4(2) of the
Securities  Act.

     On  April 3, 2001, pursuant to an Agreement and Plan of Reorganization (the
"BC  Acquisition  Agreement")  we  acquired  all the outstanding shares (the "BC
Shares")  of  common  stock of Blue Capital Associates, Inc. ("Blue Capital"), a
Delaware  corporation,  from  the  shareholders  thereof  in  an exchange for an
aggregate  of  1,162,090  shares of our common stock (the "BC Acquisition").

                                       11
<PAGE>


         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                                PLAN OF OPERATION


     The  following  discussion  and analysis should be read in conjunction with
our  consolidated  financial  statements  and  notes  included  in the financial
statements  contained  elsewhere  in  this  annual  report.

            Summary of Significant Accounting Policies and Estimates

This  discussion  and  analysis  of  our  financial  condition  and  results  of
operations  is based upon our consolidated financial statements, which have been
prepared  in  accordance  with  accounting  principles generally accepted in the
United  States  of  America.  The  preparation  of  these consolidated financial
statements  requires us to make estimates and judgments that affect the reported
amounts  of assets, liabilities, revenues, and expenses, and related disclosures
of  contingent  assets  and  liabilities.  On an on-going basis, we evaluate our
estimates,  including  those  related  to  accounts  receivable,  property  and
equipment,  stock based compensation and contingencies. We base our estimates on
historical  experience  and  on  various  assumptions  that  are  believed to be
reasonable  under  the  circumstances,  the  results of which form the basis for
making  judgments  about  the carrying values of assets and liabilities that are
not  readily  apparent  from other sources. Actual results may differ from these
estimates  under  different  assumptions  or  conditions.

The  assumptions  and  bases  for  estimates  used in preparing our consolidated
financial  statements are set forth as significant accounting policies in Note 1
of  the  notes  to the consolidated financial statements included in this annual
report  and  are  summarized  below:

Use  of  estimates -- The preparation of financial statements in conformity with
accounting  principles  generally  accepted  in  the  United  States  of America
("USGAAP")  requires  management  to  make estimates and assumptions that affect
certain  reported  amounts  and  disclosures.  Accordingly, actual results could
differ  from  those  estimates.

Revenue  recognition  --  Sales  are  recognized  when  the  earnings process is
complete  and  collectibility  is  assured,  which is usually when the goods are
shipped to customers. Amounts billed related to shipping and handling, which are
not  significant,  are  included  in  revenue.

Inventories  --  Inventories  are stated at the lower of cost, determined on the
first-in,  first-out  ("FIFO")  method,  or  market.

Property  and  equipment  --  Property  and  equipment  are  recorded  at  cost.
Depreciation  is  computed  using  the  straight-line  method over the estimated
useful  lives  of the assets (15 years for properties and three to ten years for
equipment).

                                       12
<PAGE>

     Impairment  of  long-lived  assets  --  We  have  adopted the provisions of
     Statement  of  Financial  Accounting Standards No. 121, "Accounting for the
     Impairment  of  Long-Lived  Assets and for Long-Lived Assets to be Disposed
     of"  ("SFAS  121"). Under SFAS 121, impairment losses on long-lived assets,
     such  as property and equipment and licenses, are recognized when events or
     changes  in  circumstances  indicate  that  the  undiscounted  cash  flows
     estimated to be generated by such assets are less than their carrying value
     and,  accordingly,  all  or  a  portion  of  such carrying value may not be
     recoverable.  Impairment  losses  are  then  measured by comparing the fair
     value  of  assets  to  their  carrying  amounts.

Earnings  (loss)  per  common  share  --  We present "basic" earnings (loss) per
common share and, if applicable, "diluted" earnings per common share pursuant to
the provisions of Statement of Financial Accounting Standards No. 128, "Earnings
per  Share"  ("SFAS 128") and certain other financial accounting pronouncements.
Basic  earnings  (loss) per common share is calculated by dividing net income or
loss  by  the  weighted  average  number of common shares outstanding during the
period.  The calculation of diluted earnings per common share is similar to that
of  basic earnings per common share, except that the denominator is increased to
include  the number of additional common shares that would have been outstanding
if  all  potentially  dilutive  common  shares,  such as those issuable upon the
exercise  of  stock  options,  were  issued  during  the  period.

Recent  pronouncements  --  In  August  2001, the Financial Accounting Standards
Board  issued  Statement  of Financial Accounting Standards No. 144, "Accounting
for  the  Impairment  or  Disposal  of Long-Lived Assets" ("SFAS 144"). SFAS 144
addresses  financial  accounting and reporting for the impairment or disposal of
long-lived  assets.  Among  other  things,  SFAS  144  provides  guidance on the
implementation  of  previous  pronouncements  related to when and how to measure
impairment  losses  and  how  to account for discontinued operations. Management
does  not  believe  that the adoption of SFAS 144 will have a material impact on
our  consolidated  financial  position  or  results  of  operations.

The  Financial Accounting Standards Board and the Accounting Standards Executive
Committee  of  the American Institute of Certified Public Accountants had issued
certain other accounting pronouncements as of December 31, 2001 that will become
effective  in  subsequent periods; however, our management does not believe that
any  of  those  pronouncements  would  have significantly affected our financial
accounting  measurements  or disclosures had they been in effect during 2001 and
2000,  and  it  does  not believe that any of those pronouncements will have any
significant  impact  on  our  consolidated financial statements at the time they
become  effective.

RESULTS  OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2001 COMPARED TO THE YEAR
ENDED  DECEMBER  31,  2000

     Net sales, which are solely attributable to residual sales of our skin care
products  from  previous  campaigns, totaled $20,620 for the year ended December
31, 2001, as compared to $0 for the year ended December 31, 2000.

     Cost  of  sales  totaled  $16,680  for the year ended December 31, 2001, as
compared  to  $0  for  the  year  ended  December  31,  2000.  This  increase in

                                       13
<PAGE>

attributable  to  a  corresponding  increase  in  sales.

     Operating  expenses decreased by $523,238 to $669,667 during the year ended
December  31,  2001  from  $1,192,905  for  the  year ended December 31, 2000 or
approximately  43.9%.  This  decrease  was primarily attributable to decrease in
expenditures  for  selling  and  marketing, consulting and professional fees and
other  operating  expenses  which  are  discussed  more  fully  below.

     Selling  and  marketing  expenses  decreased  approximately  $250,000  to
approximately  $58,000  during  the  year ended December 31, 2001 as compared to
approximately  $306,000 during the year ended December 31, 2000.   This decrease
was  primarily  the  result  of  the  termination  of the relationships with our
previous  marketing  companies  with  respect  to  our  skin  care  products.

     In  April  2001,  we  acquired  all of the issued and outstanding shares of
common  stock  of Blue Capital Associates, Inc. in exchange for 1,162,090 shares
of  our common stock. Prior to the acquisition, on March 5, 2001, we effectuated
a  2  for 1 forward split of our common stock. The 2 for 1 split was carried out
to  enhance  shareholder  loyalty  and  interest  in  the  Company.

     General  and  administrative expenses decreased $409,684 to $495,361 during
the  year  ended  December  31,  2001  as compared to $905,045 in the year ended
December  31,  2000, a decrease of approximately 45%. This decrease is primarily
attributable  to  a decrease in accounting and legal fees. The increased fees in
2000 were largely the result of filing the subsequently withdrawn Form 10-SB and
amendments.  With  the  exception of fees incurred in connection with the merger
with  Blue  Capital,  these  costs  are  not expected to continue in the future.

     As a result of the above, our net loss for the year ended December 31, 2001
totaled  $665,727 or $.02 per share compared to a net loss of $1,192,905 or $.07
per  share  for  the  year  ended  December  31,  2000.

               FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

     As  shown in the accompanying consolidated financial statements, we had net
losses  of approximately $665,727 and $1,192,905 in 2001 and 2000, respectively.
Management  believes  that  it is likely that the Company will continue to incur
net  losses  through at least 2002.  We also had a working capital deficiency of
approximately  $152,950 at December 31, 2001.  The working capital deficiency at
December  31,  2001  was  attributable,  in  part,  to  the inclusion in current
liabilities  of  note  payables totaling $230,000 that are payable as of October
2003.  In  the  absence  of  the  mitigating circumstances described below, such
matters could raise substantial doubt about the Company's ability to continue as
a going concern without curtailing or terminating some or all of its operations.

     To  enable  us to meet a portion of our obligations as they become due, our
Chairman and our CEO have both agreed to allow the Company to defer compensation
pursuant  to  their  employment  agreements  of  approximately  $110,000, in the
aggregate,  that  will accrue in 2002 until after December 31, 2002.  Management
also  plans  to  seek additional equity and/or debt financing and, if necessary,
request  that  our  lenders  and  other  creditors  extend  the due dates of our
obligations  and/or  convert  the  obligations  to  common  stock.  Accordingly,
management believes, but cannot assure, that we have sufficient liquid resources
for the payment, or the ability to defer the payment, of our obligations as they
come  due  and  continue  to  operate  through  at  least  August  31,  2003.

     The  Company  does  not presently have commitments to make material capital
expenditures  during  the  next twelve months.  In March of 2001 we affected a 2
for  1  split  of our outstanding shares of common stock.  The numbers of shares
and prices per share in the consolidated financial statements and notes included
herein  have  been  restated  for  the  effects  of  the  split.

     The  payment date of the 10% promissory notes outstanding totaling $437,500
in  the  aggregate  were  extended  to  September 30, 2003.  We believe that the

                                       14
<PAGE>

extension  of the maturity date of these notes, our current sources of liquidity
and  cash  on hand are sufficient to satisfy our cash needs through at least the
next  twelve  months.


                           FORWARD LOOKING STATEMENTS

     In  this  annual  report,  we  include some forward-looking statements that
involve substantial risks and uncertainties and other factors that may cause our
operational and financial activity and results to differ from those expressed or
implied  by  these  forward-looking statements.  In many cases, you can identify
these  statements  by  forward-looking  words  such  as "may," "will," "expect,"
"anticipate," "believe," "estimate," "plan," "intend" and "continue," or similar
words.  You  should  read  statements that contain these words carefully because
they  discuss our future expectations, contain projections of our future results
of  operations  or  of our financial condition, or state other "forward-looking"
information.

     You  should  not  place undue reliance on these forward-looking statements.
The  section  captioned  "Management's  Discussion  and  Analysis  of  Financial
Condition  or  Plan  of  Operation,"  as well as any cautionary language in this
annual  report,  provide  examples  of  risks, uncertainties and events that may
cause  our  actual  results  to  differ  materially  from  our  expectations.

     Although  we believe that the expectations reflected in the forward-looking
statements  are  reasonable,  we  cannot  guarantee  future  results,  levels of
activity,  performance  or  achievements.

     We  do  not  undertake  any  obligation  to  publicly  update or revise any
forward-looking  statements,  whether  as  a  result  of new information, future
events or otherwise. Because of the risks and uncertainties, the forward-looking
events  and  circumstances  discussed  in  this  annual  report might not occur.


                                       15
<PAGE>

MILLENNIUM  DIRECT,  INC.  AND  SUBSIDIARIES

INDEX  TO  CONSOLIDATED  FINANCIAL  STATEMENTS

================================================================================

                                                                     PAGE

CONSOLIDATED  FINANCIAL  STATEMENTS  AS  OF  AND
FOR  THE  YEARS  ENDED  DECEMBER  31,  2000  AND  2000:

     Independent  Auditors'  Report                                   FS-2

     Balance  Sheets  -  December 31, 2001 and 2000                   FS-3

     Statements  of  Changes  in  Stockholders'  Equity
     For  The  Years  Ended  December  31, 2001 and 2000              FS-4

     Statements  of  Operations  For  The  Years  Ended
     December  31,  2001  and  2000                                   FS-5

     Statements  of  Cash  Flows  For  The  Years  Ended
     December  31,  2001  and  2000                                   FS-6

     Notes  to  Financial  Statements                           FS-7  - FS-14




                                      FS-1
<PAGE>


                          INDEPENDENT AUDITORS' REPORT




Board  of  Directors
MILLENNIUM  DIRECT,  INC.  AND  SUBSIDIARIES
Mahwah,  New  Jersey


     We  have  audited the accompanying consolidated balance sheet of MILLENNIUM
DIRECT,  INC. AND SUBSIDIARIES  as of December 31, 2001 and 2000 and the related
consolidated  statements  of  changes  in  stockholders'  equity, operations and
accumulated  deficit  and  cash flows for the years then ended.  These financial
statements  are  the  responsibility  of  the  Company's  management.  Our
responsibility  is  to express an opinion on these financial statements based on
our  audit.

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

     In  our opinion, the financial statements referred to above present fairly,
in  all material respects, the financial position of MILLENNIUM DIRECT, INC. AND
SUBSIDIARIES as of December 31, 2001 and 2000, and the results of its operations
and  its  cash  flows  for  the  years  then  ended in conformity with generally
accepted  accounting  principles.




                         PARITZ  &  COMPANY,  P.A.


Hackensack,  New  Jersey
April  2,  2002

                                       FS-2
<PAGE>
                    MILLENNIUM DIRECT, INC. AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS
================================================================================

<TABLE>
<CAPTION>
                                                                                  ------DECEMBER  31,-----
                                                                                       2001      2000
                                              ASSETS


CURRENT ASSETS:
<S>                                                                                     <C>       <C>
  Cash                                                                            $   43,468  $  371,144
  Accounts receivable                                                                  1,477           -
  Inventories                                                                         32,105           -
                                                                                ------------- ------------
          TOTAL CURRENT ASSETS                                                        77,050     371,144
                                                                                ------------- ------------


Property and equipment, net of accumulated
  depreciation of $17,178 in 2001 and $14,075 in 2000                                  1,901       5,004
                                                                                ------------- ------------


OTHER ASSETS:
  Intangible assets, net of accumulated amortization
   of $1,100,450 in 2001 and $830,850 in 2000                                        116,290     385,900
  Video costs                                                                        262,583     262,582
  Officer loan receivable                                                            311,304     352,114
                                                                                ------------- ------------
          TOTAL OTHER ASSETS                                                         690,177   1,000,597
                                                                                ------------- ------------


TOTAL ASSETS                                                                    $     769,128  $1,376,745
                                                                                ============= ============


LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
  Accrued expenses                                                              $             $   79,800
  Note payable, current portion of long-term debt                                    230,000     230,000
                                                                                ------------- ------------

          TOTAL CURRENT LIABILITIES                                                  230,000     309,800
                                                                                ------------- ------------


LONG-TERM DEBT                                                                       285,000     285,000
                                                                                ------------- ------------

TOTAL STOCKHOLDERS' EQUITY                                                           254,128     781,945
                                                                                ------------- ------------


 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                     $    769,128  $1,376,745
                                                                                ============= ============
</TABLE>

================================================================================
                        See notes to financial statements
                                      FS-3
<PAGE>
                    MILLENNIUM DIRECT INC., AND SUBSIDIARIES

                  STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

                     YEARS ENDED DECEMBER 31, 2001 AND 2000
================================================================================

<TABLE>
<CAPTION>


<PAGE>


                                                     ADDITIONAL
                                           COMMON     PAID-IN     ACCUMULATED   SUBSCRIPTION
                                 SHARES     STOCK     CAPITAL      DEFICIT       RECEIVABLE     TOTAL
<S>                              <C>          <C>          <C>         <C>           <C>          <C>

BALANCE DECEMBER 31, 1999      1,410,264       845      $2,732,972  $(1,532,997)               $1,200,820
Net loss                                                             (1,192,905)               (1,192,905)
Common stock issued:
 Sales                         8,000,000          400      999,600                  (437,500)     562,500
 Issuance for services         7,692,000          385      211,145                                211,530
                              -----------  -----------  ----------  ------------ ------------- -----------
BALANCE DECEMBER 31, 2000     17,109,956        1,630    3,943,717   (2,725,902)    (437,500)   781,945
Net loss                                                               (665,727)               (665,727)
Common stock issued:
 Issuance in connection with
 merger                        1,162,090          116      116,093                              116,209
 Issuance for services         5,702,668          568       21,133                               21,701
                              -----------  -----------  ----------  ------------ ------------- -----------
BALANCE DECEMBER 31, 2001     23,974,714        2,314   $4,080,943  $(3,391,629)  $ (437,500)  $254,128
                              ===========  ===========  ==========  ============  ===========  ===========

==========================================================================================================

</TABLE>

                         See notes to financial statements
                                      FS-4

<PAGE>
                    MILLENNIUM DIRECT, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
================================================================================

                                   YEAR  ENDED  DECEMBER  31,
                                         2001       2000

SALES                                   $20,620         $    -

COST OF GOODS SOLD                        16,680             -
                                       ----------  ------------


GROSS PROFIT                               3,940             -
                                       ----------  ------------


COSTS AND EXPENSES:
  Selling and marketing expenses          58,097       306,119
  General and administrative expenses    495,361       905,045
  Interest income                            --        (18,259)
  Impairment loss                        116,209            --
                                       ----------  -----------

TOTAL COSTS AND EXPENSES                 669,667     1,192,905
                                       ----------  ------------


NET LOSS                               $(665,727)  $(1,192,905)
                                       ==========  ============



BASIC LOSS PER SHARE                   $    (.02)  $      (.07)
                                       ==========  ============

DILUTED LOSS PER SHARE                 $    (.02)  $     (.07))
                                       ==========  ============

================================================================================

                        See notes to financial statements
                                      FS-5
<PAGE>

                    MILLENNIUM DIRECT, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
===============================================================================================

                                                                    YEAR  ENDED  DECEMBER  31,
                                                                      2001         2000

OPERATING ACTIVITIES:

Net loss
<S>                                                                       <C>         <C>
                                                                     $(665,727)  $(1,192,905)
  Adjustments to reconcile net loss to net
    cash used in operating activities:
       Depreciation and amortization                                   272,711       246,686
       Common stock issued for services                                 21,701       211,530
       Reserve for product returns                                           -
  Changes in operating assets and liabilities:
       Accounts receivable                                              (1,477)
       Inventories                                                     (32,105)
       Accrued expenses                                                (79,800)
                                                                     ----------  ------------
NET CASH USED IN OPERATING ACTIVITIES                                 (484,697)     (734,689)
                                                                     ----------  ------------


INVESTING ACTIVITIES:
  Investments                                                                -             -
  Acquisition of property, plant and equipment                               -        10,498
  Acquisition of intangible assets                                           -             -
  Acquisition of video costs                                                 -             -
                                                                     ----------  ------------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES                          -        10,498
                                                                     ----------  ------------


FINANCING ACTIVITIES:
  Proceeds from sale of common stock, net of subscription  received    116,209       562,500
  Proceeds from issuance of long-term debt                                   -       285,000
  Increase (decrease) in stockholder loans                              40,812       (94,541)
                                                                     ----------  ------------
NET CASH PROVIDED BY FINANCING ACTIVITIES                              157,021       752,959
                                                                     ----------  ------------


INCREASE(DECREASE)  IN CASH                                           (327,676)       28,768

CASH - BEGINNING OF YEAR                                               371,145       342,376
                                                                     ----------  ------------


CASH - END OF YEAR                                                   $  43,469    $  371,144
                                                                     ==========  ============
=============================================================================================

                        See notes to financial statements
                                      FS-6
</TABLE>
<PAGE>
                    MILLENNIUM DIRECT, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                DECEMBER 31, 2001
================================================================================


1.   SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES


PRINCIPLES  OF  CONSOLIDATION

The consolidated financial statements include the accounts of Millennium Direct,
Inc  ("Millennium"),  and  its  subsidiary, which is wholly owned.  All material
inter-company  balances  and  transactions  have  been  eliminated.

BUSINESS  DESCRIPTION

Millennium  was  incorporated  in the State of Delaware on September 13, 1994 as
Kid  Rom,  Inc.  ("KRI").  Millennium  develops,  produces  and  distributes
entertaining  and  educational  videos  for  the  toddler,  children and teenage
markets.  In  February 1998, KRI acquired UltraDerma, Ltd. ("UDL") (see Note 3),
a company which develops, markets and distributes anti-aging skin care products.
On  November  18,  2000,  KRI  changed  its  name  to  Millennium  Direct,  Inc.

Millennium  currently operates two divisions; educational videos (KRI's business
since  incorporation)  and  skin  care products (the business of UDL acquired in
February,  1998).

USES  OF  ESTIMATES  IN  THE  PREPARATION  OF  FINANCIAL  STATEMENTS

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

CASH  AND  CASH  EQUIVALENTS

The  Company  considers  all  highly  liquid  debt  investments  with  original
maturities  of  three months or less when purchased to be cash equivalents.  The
carrying  amounts  approximate  fair market value because of the short maturity.

The  Company  maintains  cash  balances  at  various  financial  institutions.
Accounts  at  each  institution  are  insured  by  the Federal Deposit Insurance
Corporation  up  to $100,000.  The Company's accounts at these institutions may,
at  times, exceed the federally insured limits.  The Company has not experienced
any  losses  in  such  accounts.

                                      FS-7

<PAGE>
================================================================================

REVENUE  RECOGNITION

Revenue  from  product sales is recognized at the time the product is shipped by
the  marketer's  fulfillment center to the end user.  Orders are received by the
marketer  who  records  the  credit  card  information  of  the  purchaser  for
processing.  Orders are then sent to the fulfillment center for shipping.  Title
to  the  goods  remains  with  the  Company  until  the time that the product is
shipped.  Since  the Company retains title to the merchandise and bears the risk
of  loss  until shipment, all sales are recorded on a gross basis.  The marketer
is  only  then  paid  after  the  goods are shipped and the Company receives the
payment.

Management  provides  for  returns  and  warrantee  costs  based upon historical
amounts  and  management's  estimate  of  potential  future  claims.  Defective
products  are  either  replaced  by  the  Company at the customer's request or a
refund  is  issued upon return of the product.  Such returns are charged against
the  reserve  for returns that is reviewed by management on an ongoing basis. No
provision  for  returns  has been made for the years ended December 31, 2001 and
2000  due  to  the  lack  of  sales  in  this  period.

ALLOWANCE  FOR  DOUBTFUL  ACCOUNTS

The  allowance  for  doubtful  accounts  is  based  upon  historical amounts and
management's  estimates  of  future  potential losses.  Management believes that
since  most sales are credit card sales to the end user, no reserve is required.
As of December 31, 2001 and 2000 there was no balance in the accounts receivable
account  and,  accordingly,  no  provision  for doubtful accounts has been made.

INVENTORIES

     Inventories  are  valued  at the lower of cost (determined on the first-in,
first-out  basis)  or  market  (replacement  cost).

PROPERTY  AND  EQUIPMENT  AND  DEPRECIATION

Property  and  equipment  are stated at cost.  Major additions, improvements and
renewals,  which  substantially  increase  the  useful  lives  of  assets,  are
capitalized.  Maintenance,  repairs  and  minor  renewals are charged to expense
when  incurred.

Depreciation  is  provided  for both financial reporting and income tax purposes
using  the  straight-line  and  accelerated  methods.

VIDEO  COSTS

Video  consists  are  stated  at  cost,  less  accumulated  amortization.  Video
production  costs  and  expenses  based  on  the  ratio  of the current period's
revenues  to  estimated  total  gross revenues from all sources on an individual
production  basis.  Included  in  these  costs  are,  among  others, film crews,
cameramen  and  assistants,  scouts,  writers,  directors, sound crew, catering,
production  assistants,  transportation  costs,  studio  fees,  recording  fees,
composers,  narrators  and administrative expenses.  These costs are capitalized
into  the  final  cost  of  a  video  production and will be expenses when sales
commence.

Estimates  of  total  gross  revenues  can  change  due to a variety of factors,
including  the  level  of market acceptance of the video products.  Accordingly,
revenue  estimates  are  reviewed  periodically  and  amortization  is  adjusted
accordingly.

No  amortization expense has been charged against these costs, as the revenue is
projected  to  commence  in  the  second  quarter  of  2001.

The  Company  has  not  yet  adopted  SOP  00-2 for the periods contained in the
accompanying  financial statements.  SOP 00-2 requires, among other things, that
revenue  from  the  sale or licensing of movies, videos and similar products, be
recognized  when  certain  conditions  are  satisfied.  The Company, at present,
sells  its  videos directly to consumers or through a distributor.  Revenue from
these  individual video sales are recognized upon the delivery to and payment by
the customer.  Accordingly, adoption of SOP 00-2 will not have a material effect
upon  the  financial  statements.
                                      FS-8
<PAGE>

================================================================================

INTANGIBLES

Goodwill and intangibles represent the excess of cost over the fair value of the
intangibles  acquired and are amortized over three years for trademarks, patents
and  product development costs.  Goodwill is amortized over five years using the
straight-line  method.

RESERVE  FOR  PRODUCT  RETURNS

The  Company  has  established  a reserve for product returns based upon 7.5% of
gross  sales.  This  reserve is based upon management's estimates of the product
returns during any substantial marketing programs.  For the years ended December
31,  2001 and 2000 this amount was $0.  No reserve was established for the years
ended  December  31,  2001  and  2000  due  to  the  lack  of substantial sales.

DEFERRED  INCOME  TAXES

The  Company accounts for income taxes in accordance with Statement of Financial
Accounting  Standards No. 109 (SFAS 109) which requires that deferred tax assets
and  liabilities  be  recognized for the future tax consequences attributable to
differences  between financial statement carrying amounts of existing assets and
liabilities  and  their  respective  tax  bases.  In addition, SFAS 109 requires
recognition  of  future  tax benefits, such as carryforwards, to the extent that
realization  of  such  benefits  is  more  likely  than not and that a valuation
allowance  be  provided  when it is more likely than not that some potion of the
deferred  tax  asset  will  not  be  realized.

EARNINGS  PER  SHARE

in  1998,  the  Company  has adopted Statement of Financial Accounting Standards
("SFAS")  No.  128,  "Earnings  per share", which required retroactive adoption.
The  new  standard simplifies the computation of earnings per share and requires
the  presentation  of  basic and fully diluted earnings per share.  Basic income
per share amounts are based upon the weighted average number of shares of common
stock  outstanding  during  the  years  presented.  Diluted  earnings  per share
amounts  are  based on the weighted average number of shares of common stock and
stock  options  outstanding  during  the  years  presented.

COMPREHENSIVE  INCOME  (LOSS)

Effective  January  1, 1998, the Company adopted the provisions of SFAS No.
130, "Reporting Comprehensive Income", which modifies the financial presentation
of  comprehensive  income  and  its  components.

STOCK  BASED  COMPENSATION

SFAS No. 123, "Accounting for Stock Based Compensation" ("SFAS 123") encourages,
but  does  not  require  companies  to record compensation costs for stock-based
employee  compensation.  Millennium  has  chosen  not  to  adopt SFAS 123 and to
continue  to  account  for  stock-based  compensation  using the intrinsic value
method prescribed in Accounting Principles Board Opinion No. 25, "Accounting for
Stock  Issued  to  Employees"  and  related  interpretations.  Accordingly,
compensation  cost  for  stock options is measured as the excess, if any, of the
quoted  market  price  of  the Company's stock at the date of the grant over the
amount  an  employee must pay to acquire the stock. Stock issued in exchange for
services  rendered  are  valued based upon the fair market value of the goods or
services  received  in  exchange  for  the  stock.

During the years ended December 31, 2001 and 2000, the Company did not grant any
stock  options  and  there were no options exercised or canceled during the same
periods.  As of both December 31, 2001 and 2000, there were no outstanding stock
options  and  a valuation pursuant to the Black-Scholes option pricing method is
therefore  not  required.

The Company applies APB 25 in accounting for its stock plans and accordingly, no
compensation  costs  have  been  recognized  in  the  accompanying  financial
statements.  Since  no  options were granted, exercised or canceled during these
periods,  there  would  be no difference from the reported amounts to those that
would be shown in a pro forma fashion utilizing the Black-Scholes option pricing
method.
                                      FS-9
<PAGE>
================================================================================

IMPAIRMENT  OF  LONG-LIVED  ASSETS

Millennium  accounts  for the impairment of long-lived assets in accordance with
SFAS  No. 121 which requires that long-lived assets and identifiable intangibles
held  and  used by a company be reviewed for possible impairment whenever events
or changes in circumstances indicate that the carrying value of an asset may not
be  recoverable  (see  Note  4).

2     SEGMENT  INFORMATION

In  2000,  the  Company  adopted  SFAS  No. 131, which requires the reporting of
segment  information  using  the  "management  approach"  versus  the  "industry
approach"  previously required by SFAS No. 14, "Financial Reporting for Segments
of  a  Business  Enterprise".

Based  on  information  provided to the Company's chief operating decision maker
for  purposes  of  making decisions regarding allocating resources and assessing
performance,  the  Company's  operations have been classified into two operating
segments  that  are  strategic  business units offering distinctive products and
services  that  are  marketed  through  different  channels.

The two operating segments are: (1) sales of advanced formula skin care products
and (2) development,  production and sale of educational and entertaining videos
for  the  toddler  and  children's  market.

The  Company's  accounting policies for segments are the same as those described
in  Note  1, "Summary of Significant Accounting Policies".  Management evaluates
segment  performance  based  on  segment  operating  income  or  loss.

Summarized  financial  information  of  the  Company's  continuing operations by
business  segment  is  as  follows:

                                                        2001            2000
     NET  REVENUE:
         Skin care products                        $     20,620     $         -
         Children's videos                                    -               -
                                                   ------------     ------------
          TOTAL                                    $     20,620     $         -
                                                   ============     ============


     OPERATING  INCOME:
          Skin care products                         $(529,118)      (1,270,358)
          Children's videos                            (51,726)         (95,618)
                                                    ------------    ------------
           TOTAL                                    $ (580,844)     $(1,365,976)
                                                    ============    ============

     TOTAL  ASSETS:
          Skin care products                        $  891,046      $ 1,561,663
         Children's videos                             262,582          262,582
                                                    ------------    ------------
            TOTAL                                   $1,156,628      $ 1,510,620
                                                    ============    ============
                                      FS-10
<PAGE>
================================================================================

3     BUSINESS  ACQUISITION

On  February  1,  1998,  Millennium, through a wholly-owned subsidiary, acquired
substantially all of the assets of UDL (the "Acquisition"), for a total purchase
price  of  $1,216,750.  The  consideration consisted of $400,000 in cash and the
issuance  of  3,025,000  restricted  shares  of common stock valued at $816,750.
Concurrent  with  the  Acquisition, Millennium executed a letter agreement which
granted  to the Chairperson and Founder of UDL, anti-dilution rights pursuant to
which Millennium agreed to maintain her interest in Millennium, pending a public
offering  of Millennium's securities registered with the Securities and Exchange
Commission,  at  not  less  than  fifty-one  percent  (51%)  of  the  issued and
outstanding  common  stock.  For  purposes  of  such  calculation, Millennium is
permitted  to  include  shares  of  common  stock held by the Chairman and Chief
Executive Officer of Millennium and her husband. The excess of the consideration
paid  over  the  fair  value  of  assets  acquired,  along  with  their  related
straight-line  amortization  periods,  were:

                                AMORTIZATION
                             AMOUNT     PERIOD

     Trademarks            $  520,750          3  years
     Product  development     260,000          3  years
     Patents                   58,000          3  years
     Goodwill                 378,000          5  years
                           -----------
                           $1,216,750
                           ===========
4     INTANGIBLES

The  Company examines the carrying value of its  intangible assets in accordance
with  SFAS  No,  121,  to  determine  whether  there  are any impairment losses.
Considerable  management  judgement  is  necessary to estimate the fair value of
these  assets.  Accordingly,  the  realized  value  of  these  assets could vary
significantly  from  management's  estimates.

Management  has  utilized the sales projections provided by its new marketer and
video  distributors  in  order  to  evaluate  the  potential  revenues  from the
identified  intangibles.  Pursuant to these projections, as well as management's
analysis  of  certain  prior  years'  marketing  efforts, the Company expects to
produce  substantial  revenue  and cash flow from the intangible assets over the
next  three  years.  This  decision  was arrived at based upon a discounted cash
flow  analysis based upon the sales projections.  Although management recognizes
that  these  assets  have not produced any significant revenue during the period
covered by these financial statements, management attributes this to a change in
marketer  and the time involved in production and testing of its new infomercial
and  related  marketing  efforts.

In  April  2001, the Company acquired all of the issued and outstanding stock of
Blue  Capital  Associates,  Inc.  in exchange for stock valued at $116,206.  The
acquisition  represented  a  public  shell  corporation and as such, the Company
determined  that there was no future value to this acquisition and has therefore
provided  for  an  impairment loss in the amount equal to the consideration paid
for  the  shares.
                                      FS-11
<PAGE>
================================================================================

5     LONG-TERM  DEBT

The  notes  bear  interest at 8 1/2% per annum and are payable fifty percent of
the  outstanding  principal  plus  the accrued interest on the entire balance in
December 2001 with the balance of the remaining principal along with any accrued
interest  payable  in  December  2002.  As  of December 31, 2000, the total debt
amounted to $230,000.  Additional proceeds of $285,000 were received during 2001
and  the  entire  balance  was currently payable as of December 31, 2001.  As of
December  31,  2001, the amounts due under the terms of these notes were unpaid.
Pursuant  to  certain  default  provisions,  the entire balance is classified as
current.  The  Company  is  currently  in negotiations to extend the due date of
these  notes.

In  the  event of a default by the Company, any remaining balance at the time of
the  default is due and payable immediately.  Upon such default, the note holder
shall receive the right to convert any portion of the outstanding principal into
common  shares of the Company at a conversion price of $.50 per share.  The note
holder  would  also,  upon  default,  be  entitled  to,  among  other things, an
increased  interest  rate of approximately 11% per annum, additional payments of
..15%  of  annual  gross  sales  for  two  years  and the issuance of warrants to
purchase  one  share  for  each  dollar  of  the  initial  principal  amount.


6     NET  LOSS  PER  SHARE

Basic  loss  per  share is computed by dividing net loss by the weighted average
number  of  common shares outstanding for each year. The weighted average number
of  shares used to compute basic loss per share for the years ended December 31,
2001  and  2000  were  1,899,505  and  6,786,300  respectively.

Diluted  loss per share is computed by dividing net loss by the weighted average
number of common shares outstanding during the year plus, for 2000 and 1998, the
incremental  shares  that  would  have  been  outstanding  had  the Company been
required  to  issue  additional  shares pursuant to the Anti-Dilution Rights. In
2001  and  2000,  issuance  of  shares  pursuant to these rights would have been
anti-dilutive  and, therefore, were not considered in the computation of diluted
loss per share.     These shares total 123,617 shares for 2001 and 97,917 shares
for  2000.  As  a result, for the years ended December 31, 2001 and 2000 diluted
loss  per  share  equals  basic  loss  per  share.

7     COMMITMENTS

In  September  2000, the Company terminated a sales and marketing agreement with
a  prior  marketer  (the  "Previous  Marketer").  As  part  of  the  termination
agreement,  Millennium  and  the  Previous  Marketer  agreed  that  the Previous
Marketer  would  continue  to  sell on behalf of Millennium. Previous Marketer's
possession.  There  is no deadline for this sale of remaining inventory, but the
Previous  Marketer  continues  to  have  an  obligation  to  report all sales to
Millennium, which has retained audit rights with respect to such inventory.   In
June,  2000,  Millennium  also  terminated a separate licensing agreement it had
with  the Previous Marketer to assist Millennium in distributing the educational
videos  produced  by Millennium. Millennium paid $59,000, in the form of 200,000
shares  of  Common Stock, to terminate such agreement.   Other than as set forth
above,  neither the Previous Marketer nor Millennium has any rights, liabilities
or  obligations  to  the  other.

During  November  2000,  the  Company  entered  into a new marketing and related
production  agreement  with  a  new  marketing  company  to market the Company's
Theracel  product  line.  The  marketer is to develop direct response television
advertising  and  will  also  perform  certain  manufacturing,  warehousing  and
production  activities.  In  connection with this agreement, the Company granted
the Marketer certain incentive based stock options.  The options are exercisable
for  a  period  of  up  to five years following the completion of a "performance
year"  as  defined  in  the  Agreement.  This  Agreement  allows the Marketer to
acquire  up  to  1,350,000  shares  at  prices  ranging  between $.50 and $1.50.

                                      FS-12
<PAGE>
================================================================================

8     RELATED  PARTIES

The  Company  leases  its  office  space,  on  a  month-to-month  basis,  from a
stockholder.  For  2001  and 2000, the Company recorded rent expense under these
leases  of  approximately  $29,800  and  $36,000,  respectively.


9      INCOME  TAXES

The  tax  effect  of  the  only  item  comprising the Company's net deferred tax
position  as  of  December  31,  2001  and  2000  (see  Note  1)  is as follows:

                                                           2001       2000

  Future  tax  benefit  resulting  from  the
  availability  of  net operating loss carryforwards      $527,000   $ 620,000

  Less valuation allowance                                (527,000)   (620,000)
                                                         ----------  ----------

  Net deferred tax                                        $      0    $      0
                                                         ==========  ==========

As  of  December  31,  2001  the  Company  has  $2,997,000 of net operating loss
carryforwards  available  to  offset future taxable income.  These carryforwards
expire  as  follows:

                          2002                  $   100,100
                          2003                      768,000
                          2004 and thereafter     2,128,900
                                                ------------
                                                $ 2,997,000
                                                ============

10     STOCKHOLDERS'  EQUITY

On  June  30, 2000, the Company declared a 1 for 12 reverse stock split. In
March 2001, the Company declared a 2 for 1 stock split.   Retroactive effect has
been  given  to  these  stock  splits  in the accompanying financial statements.

Millennium  is  authorized  to issue an aggregate of 25,000,000 shares of common
stock,  par  value $.0001 per share and 10,000,000 blank check preferred shares.

COMMON  STOCK

All  outstanding  shares  of  common  stock are of the same class and have equal
rights and attributes.  The holders of common stock are entitled to one vote per
share  on  all  matters  submitted to a vote of shareholders of Millennium.  All
shareholders  are  entitled  to  share  equally  in dividends, if any, as may be
declared  from  time  to  time  by  the  Board  of  Directors.  In  the event of
liquidation,  the  holders  of common stock are entitled to share ratably in all
assets remaining after payments of all liabilities, The shareholders do not have
cumulative  or  preemptive  rights.
                                      FS-13
<PAGE>
================================================================================

PREFERRED  STOCK

The  Board  of Directors is authorized, to provide for the issuance of Preferred
Stock  in  one  or  more  series,  to establish from time to time, the number of
shares  to  be  included  in  each  such  series,  to  fix  the  voting  powers,
designations,  preferences and rights, and the restrictions of those preferences
and  rights, of the shares of each such series and to increase, or decrease such
series then outstanding, the number of shares of any such series without further
vote  or  action  by  the stockholders.  The Board of Directors is authorized to
issue  Preferred Stock with voting, conversion, and other rights and preferences
which  could  adversely  affect  the  voting power or other rights of holders of
common  stock.

11.     SUBSEQUENT  EVENT

In  November, 1999, the Company entered into a Production Services and Marketing
Agreement  with  Hawthorne  Direct,  Inc. ("Hawthorne").  This agreement expired
pursuant  to  its  terms  in July 2001.  However, Hawthorne continued to operate
under  this  agreement.  In May 2002, the Company decided to end the discussions
with  Hawthorne  and  entered into a new Production Services, Marketing Services
and  Distribution  Agreement  (the  "Production  Agreement") with Impact Product
Development,  Inc.  ("Impact").  Neither  the  Company  nor  Hawthorne  have any
remaining rights, liabilities or obligations to the other under the terms of the
expired  agreement.

Under the Production Agreement, the Company expects to sell all of our skin care
products  directly  to consumers through direct response television advertising.
The  Production  Agreement  grants  Impact  the  exclusive  rights to market and
distribute the skin care products for a period of one year following the date of
the  initial media test of a new infomercial. The initial media test has not yet
been  conducted.  The Company anticipates that the initial media test of the new
infomercial  will  be  conducted  in  November/December  2002.

The  Production Agreement is automatically renewable for one year periods in the
event  that minium levels of sales are generated by Impact (i.e., 75,000 product
units  in  year one, 100,000 product units in year two and 150,000 product units
thereafter  -  a  product  unit  consists of the five TheraCel products: (1) the
pro-cellular  formula;  (2) day moisturizer; (3) night moisturizer; (4) TheraCel
soap;  and  (5) moisturizer for dry and damaged skin).  If such sales levels are
not  met in any given year, the Production Agreement is automatically terminated
without  penalty  to  either  party.

Pursuant  to the Production Agreement,  Impact, among other things, has produced
a  new  broadcast  quality direct response television commercial ("Infomercial")
for  the  Company's  skin  care  products.  Under  the Production Agreement, the
Company  is  required to pay for the Infomercial production costs and media test
costs.  Impact  has  agreed  to advance the funds necessary to pay for the costs
associated  with  the  production,  distribution  and  marketing of the Theracel
product.  Impact  will  be reimbursed for these payments from a merchant account
into which all revenues earned and received from the sale of the product will be
deposited.  The Company will make disbursements from the merchant account to pay
for  any  costs  associated  with  marketing  and  selling the Theracel products
including  but  not  limited to production costs, media costs, telemarketing and
fulfilment  costs, operating expenses and any fees or commissions due to Impact.
Once the direct response television campaign is launched, costs are estimated to
be  approximately  $1  million  per  month  during  an  active  campaign.

Under the terms of the Production Agreement, the balance of the merchant account
after  expenses,  fees  and  other  costs  are  deducted  will be distributed to
forty-seven  and  one-half  (47.5%)  percent  to  the  Company,  forty-seven and
one-half  (47.5%)  percent  to  Impact  and  five  (5%)  percent  to Infomercial
Marketing  Partners,  LLP,  the  company  that  will  create the Infomercial. In
addition,  the  Company  has  agreed  to issue one million five hundred thousand
(1,500,000)  restricted  shares  of  common  stock  to  Impact  as  additional
compensation  under  the  Production  Agreement.
                                      FS-14
<PAGE>

                                    PART III

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

     The  following Table sets forth certain information regarding the executive
officers  and  directors  of  Millennium  as  of  October  3,  2002.

-------------------------------------------------------------------------------
NAME*              AGE       POSITION
George  Balis      52       Chairman  of  the  Board  of  Directors,
                            Chief  Executive  Officer,  Secretary

Ardis  Balis       50       President,  Director

Dan  Gorczycki     39       Director

John  Rissi        39       Director

Louis  Tallarini   54       Director
--------------------------

* - Unless otherwise indicated, the address for each officer and director is 270
Larch  Lane,  Mahwah,  New  Jersey  07430

George Balis.   George Balis, our Chief Executive Officer, Chairman of the Board
of Directors and Secretary, was in the private practice of law from 1975 through
1986,  concentrating  in  the areas of securities, corporation and entertainment
law.  From  1986  through 1992, Mr. Balis was Chairman and President of American
Screen  Company,  a diversified entertainment company which, among other things,
developed  properties  for  motion  picture and television release. From 1993 to
1998, Mr. Balis was in the private practice of law specializing in corporate and
entertainment  matters.  In  January,  1998, Mr. Balis became Chairman and Chief
Executive  Officer  of Millennium. From February 2002 to September 30, 2002, Mr.
Balis  had  been  a  partner in a law firm and during that time divided his time
between  the  Company and the practice of corporate law. Mr. Balis is a graduate
of both Columbia University's School of Law and Graduate School of Business, and
is  admitted  to  practice  law  in  the  State  of  New  York.

Ardis Balis.    Ardis Balis, our President and a director of Millennium, founded
UltraDerma,  Ltd.,  a  company  which  was acquired by us in February, 1998. Ms.
Balis  has  both  financed and researched the development of skin care products.
She  has appeared on numerous instructional videos, informercials and television
talk  shows.  Since  February,  1998,  Ms.  Balis  has been our President. Prior
thereto,  she had been Chief Executive Officer and President of UltraDerma, Ltd.

Dan  E.  Gorczycki,  C.P.A.   Dan  Gorczycki,  a  director  of  Millennium since
November  1999,  was  a  director  of  Holliday,  Fenoglio,  Fowler,  L.P.,  a
wholly-owned  subsidiary  of  Lend Lease (USA), Inc. from June 1999 to September
2000. Mr. Gorczycki is currently involved in the placement of financing and debt
restructuring  in  real  estate transactions as a principal of Granite Partners,
LLC.  His  experience includes work in institutional real estate sales for firms
including  Landauer  Associates, where he worked from June 1997 until June 1999,
Julien  J.  Studley,  Inc.,  where  he worked from March 1995 through June 1997,
and  Legg Mason. Mr. Gorczycki additionally was employed by The Greater New York
Savings  Bank  from  January  1993 until March 1995 where he was responsible for

                                       17
<PAGE>

completing  workouts  on  overleveraged  assets.  Mr.  Gorczycki's  career  also
contained  experience in the financial services industry at both Cowen & Company
(now  SG  Cowen)  and Salomon Brothers (now Salomon Smith Barney) as a financial
analyst.  Mr.  Gorczycki  started  his  professional career at Price Waterhouse,
where  he  worked  for  the  Small  Business  Group as an auditor. Mr. Gorczycki
received  his  MBA from New York University and a BS from St. John's University.
He  is  both a Certified Public Accountant (inactive) and a Licensed Real Estate
Salesperson  in  New  York  and  a  member of the Real Estate Board of New York.

John  Rissi.    John  Rissi, a director of Millennium since November 1999, began
his career in telecommunications sales for Cable & Wireless Communications, Inc.
where  he  oversaw a sales staff of more than 30 sales representatives from 1986
to  1989.  In  February  1989,  Mr.  Rissi  started  his  own marketing company,
Tele-Save,  where  he  marketed  telecommunications  services  for  various
corporations.  In August 1995, Mr. Rissi entered into an agreement with VoiceNet
Corporation to market their credit calling card program through April 1999. From
April  1999 to the present, Mr. Rissi co-founded Mutual Media Corporation, Inc.,
a marketing company that specializes in marketing major web sites throughout the
world.  Mr.  Rissi  received  his  B.S.  at  Hofstra  University.

Louis  A.  Tallarini. Louis Tallarini, a director of Millennium since June 2000,
has  been executive vice president for Fuller Development Company, a division of
Cappelli  Enterprises,  Inc.  from  October  1999  to  the present. From 1991 to
September 1999 he served as Executive Vice President and member of the Executive
Committee  of  The  Value  Companies,  where  he  was  responsible for the asset
management  of  a  national  real estate portfolio of commercial properties. Mr.
Tallarini  began  his  career  as an accountant with the international certified
public  accounting  firm  Pannell,  Kerr  Foster.  Following  his  career  as an
accountant,  he  entered  private industry where he has supervised institutional
real  estate  management  teams  throughout the United States. Mr. Tallerini has
been  involved  in philanthropic endeavors, including serving as Chairman of the
Board  of the Singers Forum Foundation; funding scholarships for underprivileged
minority  children  through  the Graham Windham foster child program; and making
available  affordable  housing  for  needy  families.  Mr. Tallarini sits on the
Executive  Committee of Value Express, a national commercial real estate lender.
Mr.  Tallarini  received  his  B.S.  from  Fordham  University.

     Family  Relationship

     George  Balis  is  the  husband  of Ardis Balis.  They were married in May,
1998.

     Section  16(a)  Beneficial  Ownership  Reporting  Compliance

     Section  16(a)  of  the  Exchange Act requires the Company's director's and
executive  officers,  and  persons  who  own  more  than  10%  of  the Company's
outstanding  common  stock,  to file with the SEC, initial reports of beneficial
ownership and reports of changes in beneficial ownership of the Company's common
stock  and  other equity securities of the Company.  To the Company's knowledge,
as  of  the  fiscal year ended December 31, 2001, George Balis, Ardis Balis, Dan
Gorczycki,  John Rissi and Louis Tallarini have not filed the required forms
under  Section  16(a)  of  the  Exchange  Act.

                                       18
<PAGE>
                             EXECUTIVE COMPENSATION

     The  following table sets forth all cash compensation paid or to be paid by
us,  as  well  as  certain  other  compensation  paid  or  accrued, to officers,
directors  and  certain  key  employees.
<TABLE>
<CAPTION>

                                                        ANNUAL  COMPENSATION
                                                      SALARY    BONUS    OTHER
<S>                                                    <C>       <C>      <C>
NAME  AND  PRINCIPAL  POSITION

George  Balis                            2001          60,000     -0-     -0-
Chairman,  Chief  Executive  Officer     2000            -0-      -0-     -0-
and  Secretary                           1999            -0-      -0-   $35,000  (2)

Ardis  Balis  (1)                        2001          50,000     -0-     -0-
President  and  Director                 2000            -0-      -0-     -0-
                                        1999             -0-      -0-   $35,000  (2)

</TABLE>
--------------------
(1)  Ms.  Balis  became  an  employee  of  Millennium  in  February,  1998.
(2)  On  November  18,  1999,  each  of  George Balis and Ardis Balis was issued
350,000  shares  of  Common  Stock,  at a value of $.10 per share or $35,000, as
compensation  for services rendered by each of them as officers and directors of
Millennium  in  1999.

     Director's  serve  for a term of one year, until their or their successor's
election  at  the  next  annual  meeting  of  stockholders.

     In  January  2001,  George  Balis  and Ardis Balis each executed employment
agreements.  These  employment  agreements are for a term of three years and are
automatically  renewed  for  one year periods unless given six (6) months notice
from  the  Company  that  the  agreements  will  not be renewed.   George Balis'
agreement  provides  for  a  base  annual  salary  of  $60,000  and Ardis Balis'
agreement provides for a base annual salary of $50,000.  Each agreement provides
for  reimbursement by the Company of reasonable expenses.  There is no provision
in  either  agreement  providing  for  increases to these base salaries and each
agreement  can  be  terminated by the Company only for cause.  Pursuant to these
agreements,  each of them has agreed not to compete with Millennium for a period
of  one  year  following  termination  of  the  agreement.

     On  November  18,  1999,  each  of George Balis and Ardis Balis were issued
350,000  shares  of  Common  Stock,  at a value of $.10 per share or $35,000, as
compensation  for services rendered by each of them as officers and directors of
Millennium  in  1999.  No  other  compensation  has  been paid to any officer of
Millennium  since  1996  and, other than as set forth above, no compensation has
been  accrued  since that time through September 30, 2002. George Balis received
300,000  shares  of common stock, having a value of $15,000, as a director's fee
for  his  service  as  a  director  in  1997.  Mr. Balis is not owed any further
compensation for any services rendered to Millennium prior to November 15, 1999.
George  and  Ardis  Balis have also received loans from Millennium. See "Certain
Relationships  and  Related  Transactions."

     Historically, directors who are not members of management have not received
any compensation for their services as such; however, in June 2000, prior to the
1  for  12 reverse split of our common stock, as compensation for serving on the
Board  of  Directors,  Dan Gorczycki, Louis Tallarini and John Rissi were issued
75,000,  225,000  and  375,000  shares  of  common stock respectively, valued at

                                       19
<PAGE>

$0.0001 per share.  In addition, Messrs. Gorcycki, Tallarini and Rissi were each
issued warrants to purchase 6,250 shares of common stock at an exercise price of
$.50  per  share.  Furthermore,  in  January  2001, prior to the 2 for 1 forward
split  of  our  common  stock,  as  compensation  for  serving  on  the Board of
Directors,  Dan  Gorczycki,  Louis  Tallarini,  John Rissi and George Balis were
issued  75,000,  75,000, 375,000 and 75,000 shares of common stock respectively,
valued  at  $.0001  per  share.


               SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                                   MANAGEMENT

     The following table sets forth, as of October 3, 2002, the name and address
of  each  officer  and  director  of  the  Company  and  each  person  who  owns
beneficially  more than five percent of the Common Stock of the Company, and the
number  of shares owned by each such person and by all officers and directors as
a  group:

NAME  AND ADDRESS                  AMOUNT AND NATURE OF        PERCENT OF CLASS
OF  BENEFICIAL  OWNER*             BENEFICIAL  OWNERSHIP       COMMON STOCK
------------------------         ------------------------     ----------------

George  Balis                        10,878,852  (1)(3)        45.4%  (4)


Ardis  Balis                         10,878,852  (2)(3)        45.4%  (4)


BVI  Corporate  Services  Ltd.        3,093,985(5)             12.9%
P.O.  Box  733
Spring  Gates  South
Lower  Government  Road
Charlestown,  Nevis,  West  Indies

Sea  Spray Holdings Ltd.             2,303,985(6)               9.7%
Craigmuir  Chambers
P.O.  Box  71  Road  Town  Tortola
British  Virgin  Islands

B.R.  Equities,  Inc.                1,750,000                  7.3%
490  Wheeler  Road,  Suite  150
Hauppague,  New  York  11788

John  Rissi                            913,000                  3.9%

Louis  Tallarini                       287,500                  1.2%

Dan  Gorczycki                         222,500                    1%

ALL  OFFICERS  AND
DIRECTORS  AS  A
GROUP  (5  Individuals)             12,345,552                 51.6%
----------------------------

*-  Unless  otherwise  stated,  the address for each officer and director is 270
Larch  Lane,  Mahwah,  New  Jersey,  07430

(1)  Includes  10,570,338  shares  owned  by Ardis Balis, Mr. Balis' wife, as to
which  shares  Mr.  Balis  has  voting  control.

(2)  Includes  308,514  shares  owned by George Balis, Ms. Balis' husband, as to
which  shares  Ms.  Balis  disclaims  beneficial  ownership.

(3)  Ardis  Balis' shares are subject to a voting agreement entered into in July
2000  pursuant  to  which  all  of  Ms. Balis' shares are voted by George Balis.

                                       20
<PAGE>

(4)  In  accordance with the anti-dilution agreement, the Company is required to
issue  additional  shares to Ms. Balis to ensure that she maintains a 51% of the
outstanding  shares  of  the  Company's  common  stock.

(5)  Consists  of  2,303,985  shares held by Sea Spray Holdings Ltd. and 790,000
shares  held  by  Bay Partners, Ltd., companies for which BVI Corporate Services
Ltd.  has both investment and voting control. BVI Corporate Services Ltd. is the
sole  director  of  Sea  Spray  Holdings  Ltd.  and  Bay  Partners,  Ltd.

(6) Includes 1,200,000 shares acquired from Infotopia, Inc. and 1,103,985 shares
acquired from Eastside Venture Partners, LLP ("ESVP"), a wholly owned subsidiary
of  Infotopia,  Inc.  In  connection  with the BC Acquisition, ESVP acquired the
Company  shares  in  exchange  for  the  BC  Shares.  Sea  Spray, as the secured
creditor  of  Infotopia,  Inc.,  acquired  all  of these shares as a result of a
default  by  Infotopia,  Inc.  on  an  outstanding obligation owed to Sea Spray.


                 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

     George Balis is the husband of Ardis Balis. They were married in May, 1998.
Mr.  Balis  currently  serves  as  our Chairman of the Board of Directors, Chief
Executive  Officer and Secretary. Mrs. Balis currently serves as President and a
member  of  the Board. All of Ardis Balis' shares of Millennium common stock are
subject  to a voting trust agreement entered into in July 2000 pursuant to which
all of Mrs. Balis' shares are voted by George Balis. The voting agreement is for
a  term  of  twenty-one  years.  During  the term of the agreement Mr. Balis has
unrestricted  discretion to vote the shares subject to the agreement. The shares
subject  to  the  agreement  consist  of all of the shares owned by Mr. and Mrs.
Balis.

     A  summary  of the transactions in the amounts due from/to Mr. & Mrs. Balis
as  of  the  year ended December 31,  2001  is  as  follows:

Balance  January  1,  1998                $9,031
Repaid                                    (9,031)
Advances                                 161,621
Liability  incurred  in  connection
 with acquisition of Ultraderma         (162,500)
                                       ----------
Balance  December  31,  1998                (879)
Cash  advances                           258,452
                                       -----------
Balance  December  31,  1999             257,573
Cash  advances                            94,541
                                       -----------
Balance  December  31,  2000            $352,114
Cash  Repayments                         (40,810)
                                       -----------

Balance  December  31,  2001            $311,304
                                       ===========

The  loans  receivable/payable  are  non-interest  bearing and due on January 1,
2003.

     In  December, 1998, we had advanced $161,621 to George Balis, our chairman,
to  obtain  a nineteen percent (19%) equity interest in a company which develops
and  markets  gourmet  snack  foods.

     On  May  1,  1998  and September 28, 1998, George Balis transferred 400,000
shares  and  200,000  shares,  respectively,  of  common stock to Ardis Balis to
enable us to meet our obligation to Mrs. Balis with respect to the anti-dilution
agreement  executed  concurrent  with the UDL acquisition agreement. On November
18,  1999  we issued an additional 400,000 shares of common stock to Ardis Balis
to  enable  us  to  meet  our  obligation  to  Ms.  Balis  with  respect  to the
anti-dilution  agreement executed concurrent with the UDL acquisition agreement.
In addition, in June 2000 and January 2001, Ardis Balis was issued 1,923,000 and
4,952,334  shares  of our common stock respectively to be in compliance with the
anti-dilution  agreement executed concurrent with the UDL acquisition agreement.
The  anti-dilution  agreement  executed  concurrent  with  the  UDL  acquisition
agreement  requires  us  to insure that Ardis Balis, until such time as we shall
complete  a  public  offering  of  our shares registered with the Securities and

                                       21
<PAGE>
Exchange  Commission, maintains an equity position in Millennium of no less than
51%  of  all  issued  and  outstanding shares of common stock of Millennium. For
purposes  of  such  calculation,  Millennium  is  permitted to include shares of
common  stock held by George Balis, our Chairman and the husband of Ardis Balis.

     In October 2000, Millennium, sold 4,000,000 shares of its common stock at a
price  of  $.25  per  share  in  a  private placement pursuant to a registration
statement  flied  with  the  State of Georgia, which transaction was exempt from
registration  pursuant  to  Section  3(b) of the Securities Act and Regulation D
promulgated  thereunder,  specifically,  Rule  504 thereof. The 4,000,000 shares
were  sold  to  seven  accredited  investors  for  $562,500 in cash and $437,500
principal  amount  of  10% promissory notes due January 1, 2001, which have been
extended  by  mutual  agreement  to  September  30,  2003.

     On  April 3, 2001, pursuant to an Agreement and Plan of Reorganization (the
"BC  Acquisition  Agreement")  we  acquired  all the outstanding shares (the "BC
Shares")  of  common  stock of Blue Capital Associates, Inc. ("Blue Capital"), a
Delaware  corporation,  from  the  shareholders  thereof  in  an exchange for an
aggregate of 1,162,090 shares of our common stock (the "BC Acquisition"). At the
time  of  the  BC  Acquisition, East Side Venture Partners, LLC owned 95% of the
outstanding  shares  of  Blue  Capital.  Prior  to the BC Acquisition, East Side
Venture Partners, LLC was the wholly-owned subsidiary of Infotopia, Inc., one of
our shareholders owning, at that time, greater than 5% of our outstanding common
stock.  The  consideration  exchanged  was  negotiated  between  Blue  Capital's
shareholders  and  Millennium.






                                       22
<PAGE>


                        EXHIBITS AND REPORTS ON FORM 8-K

(a)   Exhibits:
<TABLE>
<CAPTION>
<S>                            <C>

Exhibit Number      Description  of  Document
-------------       ------------------------------

3.1                 Articles  of  Incorporation of Millennium Direct, Inc.,  as  amended.  (1)

3.2                 Amendments  to  Articles  of  Incorporation  of Millennium  Direct,  Inc.  (1)

3.3                 By-Laws  of  Millennium Direct, Inc., as amended. (1)

9.1                 Voting  trust  Agreement  dated July 5, 2000. (1)

10.1                Letter  agreement  between  Millennium  Direct and Ardis  Boyd  dated
                    February,  1998.  (1)

10.2                Production  Services  and  Marketing  Agreement, dated November 3, 1999
                    between  the  Company and Marketer, and related Stock Option Agreement. (1)

10.3                Acquisition  Agreement  dated  February  1,  1998,  by  and  between
                    UltraDerma,  Ltd.,  and  Kid  Rom,  Inc.  (2)

10.4                Agreement  and  Plan  of Reorganization and Merger thereto  between
                    Millennium  Direct,  Inc.  and  Blue  Capital  Associates, Inc. dated March
                    21,  2001.  (1)

10.5                License Agreement for TheraCel product dated May 1, 1997. (2)

10.6                Extension  of  License  Agreement  dated  May  14,  2002.  (2)

10.7                George  Balis  Employment  Agreement  dated  January  1, 2001. (2)

10.8                Ardis  Balis  Employment  Agreement  dated  January  1,  2001. (2)

10.9                Production  Services,  Marketing  Services,  and  Distribution Agreement
                    between  Millennium  and Impact Product Development dated May 8, 2002. (2)

16.1                Accountant's  letter  dated  August,  2001.  (1)

99.1                Certification  of  George  Balis  pursuant  to  Section 906 of the Sarbanes-Oxley
                    Act  of  2002.

</TABLE>

--------------------------------------
(1)  Filed  as  exhibit  to  Amendment  Number  2  to the Current Report on Form
     8-K12g-3/A  filed  with  the  SEC  on  August  7,  2001.
(2)  Filed  as  exhibit  to  Amendment  Number  3  to the Current Report on Form
     8-K12g-3/A  filed  with  the  SEC  on  October  22,  2002.


(b)  There  were no Current Reports on Form 8-K filed during the last quarter of
the  period  covered  by  this  report.
                                       23
<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.

MILLENNIUM  DIRECT,  INC.


By  /s/  George  Balis
    ------------------
George  Balis,  Chief  Executive  Officer,
Chairman  of  the  Board  of  Directors  and
Principal  Accounting  Officer

Date:  October  22,  2002


     In  accordance  with the Exchange Act, this report has been signed below by
the  following persons on behalf of the Company and in the capacities and on the
dates  indicated.

<TABLE>
<CAPTION>

SIGNATURE                               TITLE                                  DATE
<S>                                      <C>                                    <C>

/s/  George  Balis              Chairman  of  the Board, CEO and Principal
------------------              Accounting  Officer                          October  22, 2002

/s/  Ardis  Balis               President,  Director                         October  22, 2002
------------------

/s/  John  Rissi                Director                                     October  22, 2002
----------------


</TABLE>
                                       24
<PAGE>

                                 CERTIFICATIONS


I,  George  Balis,  certify  that:

1.     I  have  reviewed  this  quarterly  report  on  Form 10-KSB of Millennium
Direct,  Inc.;

2.          Based  on  my  knowledge, this quarterly report does not contain any
untrue  statement  of a material fact or omit to state a material fact necessary
to  make  the  statements  made,  in light of the circumstances under which such
statements  were made, not misleading with respect to the period covered by this
annual  report;

3.          Based on my knowledge, the financial statements, and other financial
information  included  in  this  annual  report,  fairly present in all material
respects  the  financial  condition, results of operations and cash flows of the
registrant  as  of,  and  for,  the  periods  presented  in  this annual report.


Date:  October  22,  2002



/s/  George  Balis
------------------
George  Balis
Title:  Chief  Executive  Officer,  Secretary
and  Principal  Accounting  Officer

                                       25
<PAGE>
EXHIBIT  99.1

                             MILLENNIUM DIRECT, INC.
                           CERTIFICATION  PURSUANT  TO
                             18 U.S.C. SECTION 1350,
                       AS ADOPTED PURSUANT TO SECTION 906
                        OF THE SARBANES-OXLEY ACT OF 2002


     In  connection  with  the  Annual  Report  of  Millennium Direct, Inc. (the
"Company") on Form 10-KSB for the period ending December 31, 2001, as filed with
the  Securities  and  Exchange  Commission on the date hereof (the "Report"), I,
George  Balis,  the Chief Executive Officer, Secretary, and Principal Accounting
Officer  of  the  Company,  hereby  certify,  pursuant to 18 U.S.C. ss. 1350, as
adopted  pursuant  to  ss.  906  of  the  Sarbanes-Oxley  Act  of  2002,  that:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of
the  Securities  Exchange  Act  of  1934;  and

(2)  the  information  contained  in the Report fairly presents, in all material
respects,  the  financial  condition  and  result  of operations of the Company.

                                             /s/  George  Balis
                                             ------------------
                                             George  Balis

                                             CEO,  Secretary  and  Principal
                                             Accounting  Officer
October  22,  2002




                                       26
<PAGE>