FORM 10-KSB/A
                               (Amendment No. 1)
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

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

                  FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2004

                         EARTHWORKS ENTERTAINMENT, INC.
                            (FORMERLY eContent, Inc.)

             (Exact name of registrant as specified in its charter)





          DELAWARE                                            23-2442288
------------------------------                         ----------------------
State or other jurisdiction of                            (I.R.S. Employer
incorporation or organization)                          Identification Number)

324 Dutura St., West Palm Beach, FL                             33314
----------------------------------------                      ----------
(Address of principal executive offices)                      (Zip Code)

                                 (561) 719-9841
                           (Issuer's Telephone Number)

           SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
                                      NONE
                                (Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes /X/ No / /

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definite proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-K. Yes /X/

Indicate by check whether the issuer has filed all documents and reports
required to be filed by Section 12, 13, or 5(d) of the Exchange Act
afterdistribution of securities under a plan confirmed by a court. Yes /X/
No / /

     Effective November 15, 2004 Company had 65,730,863 shares of common stock
and no shares of preferred stock outstanding.

Amendment No. 1
---------------

     This amendment is filed in order to remove the audit opinion of Schuhalter,
Coughlin & Suozzo P.C. with respect to the financial statements for the year
ended September 30, 2003 and the period from inception to September 30, 2003
that was included in the original filing. The opinion is being removed because
Schuhalter, Coughlin & Suozzo P.C. was not registered with the Public Company
Accounting Oversight Board at the time it rendered its opinion.


                                      -1-
<PAGE>


PART I

ITEM 1. BUSINESS.

GENERAL DESCRIPTION OF BUSINESS

Earthworks Entertainment, Inc. (formerly eContent, Inc.) is a reporting public
company listed on the NASDAQ OTC:BB and currently trades its common stock under
the symbol "EWKE" pursuant to a special stockholders' meeting held on November
24, 2003 (previously traded under the symbol ETNT). The Company is a development
stage company and the Company has not yet recorded any revenue since inception,
as restated for the termination of its investment in MPI. The Company recorded a
net loss of $1,318,249 for the year ended September 30, 2004 as compared to a
loss of $1,325,452 for the period ended September 30, 2003.

The Company's primary business is the creation, co-production, marketing and
distribution of high quality, world class children's and family oriented
entertainment properties. The properties are marketed in all multi-platform
areas of commercial exposition ranging from Television to Home Video to
Merchandise Licensing to Electronic & Video Games to Book and Music Publishing.

The Company also forms Teaming Agreements with outside companies for the
co-operative marketing of hit potential entertainment properties. The Company is
establishing an artistic & commercial `bridge' between producers, TV
broadcasters, publishing companies and merchandise groups in North America,
Europe and Asia. The establishment of such `bridge' relationships among
entertainment entities, who otherwise would not be able to globally expand their
world market share in such a near horizon timeframe, will ensure that the
Company is privy to substantial `first look/first option' opportunities on a
wide array of world class entertainment properties.

On February 7, 2003 the Company entered into a conditional plan for a corporate
combination agreement to merge with Anglebabies LLC, a California Limited
Liability Company. The terms of the agreement provided for the Comapny to
receive 100% of all Anglebabies, LLC's interests; in exchange for which the
interest of the members of the limited liability company were to be issued
shares of Earthworks Entertainment common or preferred stock, totaling
approximately 80% of the value of the new combination. The number of shares to
be issued were subject to an adjustment after the issuance of a fairness
opinion. All terms and conditions of the agreement were subject to shareholder
approval. On June 13, 2003 the Company elected to not implement this agreement
and the proposed merger with Angel Babies, LLC was terminated.

On June 15, 2003 the Company appointed Peter Keefe as the Company's President.
Management considered that Mr. Keefe's network of global contacts, associations
and affiliations in the children's and family entertainment and licensing
industries would connect the Company with a uniquely broad, and extremely
valuable, base of exciting revenue generating marketing opportunities. At that
time, the Company began to establish its current platform to launch properties
and products in the global television, home video/DVD and merchandise licensing


                                      -2-
<PAGE>


marketplace. The Company began marketing of the Nine Dog Christmas, Nine Dog
Night of Fright and Z-Force animated entertainment properties. On December 31,
2003, the Company's Board of Directors approved an agreement with Peter Keefe,
the Company's president, pursuant to a deal memorandum dated December 1, 2003,
which was intended to be binding and subject to definitive agreements. Effective
April 26, 2004, in exchange for the issuance of 10,000,000 restricted shares of
the Company's common stock valued at $2,000,000, Mr. Keefe executed an agreement
whereby the Company has acquired rights to certain properties which are
allocated as follows:



Rights Acquired                              Property Name         $ Allocation

Profit Participation Ownership                  Z-Force                 45%

Global Management & Control of TV & Home
 Video/DVD Sales, Toys and Merchandise
  Licensing, Distribution, Production and
  all Related Activities                        Z-Force                100%

 TOTAL Z-FORCE $ ALLOCATION                     $1,700,000
                                                 ---------
Gross Royalty Revenue from all World Wide
  Merchandise Licensing Activities              Nine Dog Property       10%

Gross Royalty Revenue from any Toy &
  Licensing Deals negotiated by Earthworks      Nine Dog Property       25%

Gross Royalty Revenue World Wide
  Home Video/DVD Sales                          Nine Dog Property       10%

 TOTAL NINE DOG $ ALLOCATION                       300,000
                                                ----------
Total                                           $2,000,000
                                                ==========
ORGANIZATIONAL BACKGROUND

Earthworks Entertainment, Inc., previously named Gulfstar Industries, was
incorporated under the laws of Delaware on December 3, 1986. Gulfstar evolved
into a holding company with two wholly owned subsidiaries, Plant Technical
Services, Inc., an engineering consulting and placement service and Tier
Environmental, an environmental preservation company, both of which discontinued
operations in the fiscal year ended September 30, 1997. On July 22, 1997,
Gulfstar filed a petition for reorganization under Chapter 11 of the Federal
Bankruptcy Code. On September 2, 1998 the Court approved a proposed plan of
reorganization, which would be funded through the reverse merger of Gulfstar
with Media Vision Productions, Inc. ______ On January 4, 1999, the merger was
consummated, Gulfstar was recapitalized and changed its name to Media Vision
Productions, Inc. The original Gulfstar shareholders retained 367,355 shares (7%
at the time of recapitalization), in the new company. The Gulfstar creditors
were issued 30,970 shares (.6% at the time of recapitalization).


                                      -3-
<PAGE>


On October 1, 1999, the stock commenced trading, with a new name, e-Content,
Inc., a new symbol, "ETNT" with a new focus on Television Driven E-Commerce
Marketing.

On September 5, 2000 the Company incorporated a wholly owned subsidiary to hold
and capitalize on its sports marketing licenses called National Licensing
Corporation.

During the year ended September 30, 2000, the Company initially recorded its
investment in MPI as a consolidated subsidiary of ETNT pursuant to a stock
purchase agreement from May of 2000. Upon the acquisition of a 51% interest in
MPI at that time, the Company had a conditional option to acquire the remaining
49% of MPI, with certain extensions through July 30, 2001. On July 30, 2001, the
company let its right to complete the acquisition of MPI expire, and subject to
the return of certain shares, the Company forfeited any interest in MPI. The
Company restated its financial statements for the fiscal year ended September
30, 2000 to record this investment as an unconsoliated subsidiary in its filing
for the fiscal year ended September 30, 2001 in which the Company recorded a
loss on the termination of its investment in MPI effective July 30, 2001. (See
Part 7. F/S).

Subsequent to September 30, 2001, the Company and MPI concurrently exchanged
certain releases relating to the preceding and entered into a preliminary
program production agreement, which in light of all the factors the Company
considered, gave the Company the most dexterity to implement its business plan
at that time. On September 30, 2003, the Company executed an agreement to
terminate its preliminary production agreement with MPI. As part of the
agreement, the Company issued 125,000 shares of its common stock to MPI and
canceled 1,400,000 warrants issued to MPI's President, Robert Marty, as part of
the initial production agreement. Additionally, both parties agreed to cancel
outstanding notes due to and from the company, and again provide certain
releases.

On February 7, 2003 the Company entered into a conditional plan for a corporate
combination agreement to merge with Anglebabies LLC, a California Limited
Liability Company. The terms of the agreement provided for the Company to
receive 100% of all Anglebabies, LLC's interests; in exchange for which the
interest of the members of the limited liability company were to be issued
shares of Earthworks Entertainment common or preferred stock, totaling
approximately 80% of the value of the new combination. The number of shares to
be issued were subject to an adjustment after the issuance of a fairness
opinion. All terms and conditions of the agreement were subject to shareholder
approval. On June 13, 2003 the Company elected to not implement this agreement
and the proposed merger with Angel Babies, LLC was terminated.

On June 15, 2003 the Company appointed Peter Keefe as the Company's President.
Management considered that Mr. Keefe's network of global contacts, associations
and affiliations in the children's and family entertainment and licensing
industries would connect the Company with a uniquely broad, and extremely
valuable, base of exciting revenue generating marketing opportunities. At that
time, the Company began to establish its current platform to launch properties
and products in the global television, home video/DVD and merchandise licensing


                                      -4-
<PAGE>


marketplace. The Company began marketing of the Nine Dog Christmas, Nine Dog
Night of Fright and Z-Force animated entertainment properties. On December 31,
2003, the Company's Board of Directors approved an agreement with Peter Keefe,
the Company's president, pursuant to a deal memorandum dated December 1, 2003,
which was intended to be binding and subject to definitive agreements. Effective
April 26, 2004, in exchange for the issuance of 10,000,000 restricted shares of
the Company's common stock valued at $2,000,000, Mr. Keefe executed an agreement
whereby the Company has acquired rights to certain properties.

On November 24, 2003 the Company issued a proxy and held a Special Meeting of
Stockholders (see Item 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS).
The matters considered at this meeting were to:

1)   increase the number of the Company's Authorized Common Stock from
     50,000,000 to 100,000,000,
2)   change the Company's Common Stock Par Value from $.08 to $.0015, and
3)   change the Company name to Earthworks Entertainment, Inc.

All of these matters were approved by the shareholders.

EMPLOYEES AND CONSULTANTS

As of September 30, 2004, the Company had 2 executive employees. In June and
July 2003, the Company executed employment contracts with its President and CEO,
and, its Executive Vice President and CFO, respectfully. Also, the Company
utilizes consultants from time to time on an as needed basis.

LICENSING RIGHTS

On October 5, 1999, the Company entered into a licensing agreement with an
individual and Spartan Sporting Goods and Fashions, Inc. ("Spartan") a privately
held New York Corporation for the exclusive master license of certain logos,
trademarks and copyrights. The agreement provided that the Company pay 30% of
all royalty income received under this agreement to the Licensor, or "Spartan".
Additionally, the agreement provided for minimum annual non-refundable license
fees for each optional renewal, potentially through 2008. Effective December 31,
2002, the Company decided not to renew the agreement with Spartan. As of
September 30, 2003, net of the settlement of $100,000 for 1,200,000 shares,
$102,400 remained due to Spartan for unpaid license rights fees. During the
period ended June 30, 2004, the Company settled the remaining balance with
Spartan.

On December 31, 2003, the Company's Board of Directors approved an agreement
with Peter Keefe, the Company's president, pursuant to a deal memorandum dated
December 1, 2003, which was intended to be binding and subject to definitive
agreements. Effective April 26, 2004, in exchange for the issuance of 10,000,000
restricted shares of the Company's common stock valued at $2,000,000, Mr. Keefe
executed an agreement whereby the Company has acquired rights to certain
properties, including direct profit participation, merchandise licensing and
distribution and the television distribution rights in connection with the Nine
Dog Christmas, Nine Dog Night of Fright and Z-Force animated show properties.


                                      -5-
<PAGE>


ITEM 2. PROPERTIES.

The West Palm Beach office was closed in May, 2001. The Company plans to open
new offices in the Los Angeles area within the next Fiscal Year. The Company
continues to maintain a temporary office at 324 Datura Street, Suite 200, West
Palm Beach, Florida.

ITEM 3. LEGAL PROCEEDINGS.

In May 2001, the prior president instituted a suit in federal court against the
Company's president at that time and an investment banker, in connection with
his termination. This suit was dropped. His termination resulted in the return
of certain shares to the Company and a consulting contract for $2,500 per week
for 103 weeks commencing on May 29, 2001.

In December 2002, a former vendor filed a complaint against the Company and its
former president in the Circuit Court of the Fifteenth Judicial Circuit in Palm
Beach County seeking reimbursement of unpaid storage fees due on office
furniture and equipment held on behalf of the Company. The Company filed a
counter complaint seeking damages for the unauthorized release of the office
furniture and equipment to a former employee and to a vendor.

In July 2003, the suit was settled in favor of the Company, resulting in a cash
payment of $12,500 to the Company as well as the settlement of $13,500 of
accounts payable due to the former employee and $17,126 of accounts payable due
to a vendor.

In September 2003, the Company was advised that a default judgement in the
amount of $32,000 (plus accrued interest and legal fees) was recorded against
the Company in connection with a note payable executed in 1999. In December
2003, the Company reached a settlement agreement with the note obligor, whereby
it issued 200,000 shares of its Common Stock in exchange for a full release of
the judgement.

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

During the current fiscal year ended September 30, 2004, the Company issued a
proxy and held a Special Meeting of Stockholders on November 24, 2003. Matters
considered at the Special Meeting were:

1)   INCREASE THE NUMBER OF AUTHORIZED COMMON SHARES:

At the Special Meeting, the Company's Stockholders were asked to approve the
increase of the number of the Company's Authorized Common Stock from Fifty
Million (50,000,000) to One Hundred Million (100,000,000). The increase in the
number of Authorized Common Shares was requested for the following reasons:

     A.   The Company is actively looking to acquire ownership positions in
          entertainment properties and to be successful will need additional
          shares to complete such transactions, as called for in such
          agreements, on a case by case basis.


                                      -6-
<PAGE>


     B.   To attract and keep key executives. Shares made available for
          incentives and employment agreements.
     C.   Shares made available for Employee Stock Ownership Plans (ESOP)
     D.   The Company's success depends in large part on its ability to raise
          capital. In order for the Company to raise capital, additional shares
          must be made available for offerings including common stock, equity,
          convertible preferred, or convertible debt.

2)   PAR VALUE CHANGE - COMMON STOCK

At the Special Meeting, the Company's Stockholders were also asked to approve
the change of the Company's Common Stock Par Value from $.08 to $.0015. This
change will have no material effect on the Company's balance sheet, but will
save the Company thousands of dollars each year when calculating its Delaware
franchise tax.

3)   CHANGE THE NAME OF THE COMPANY TO EARTHWORKS ENTERTAINMENT, INC.

The Company requested the change of its name from eContent, Inc. to Earthworks
Entertainment, Inc. which the Company believes will have a positive acceptance
in the marketplace, and which reflects the Company's new business model.

As at December 11, 2003, Computershare Trust Company, Inc. provided the
following proxy count of all outstanding votable shares for all proposals voted
at the Special Meeting of Shareholders held on November 24, 2003:

Proposal #1 INCREASE THE NUMBER OF AUTHORIZED COMMON SHARES

            For            Against      Abstain
         25,211,662        860,888       2,580

Proposal #2 PAR VALUE CHANGE - COMMON STOCK

            For            Against      Abstain
         24,792,327        461,457      821,346

Proposal #3 CHANGE THE NAME OF THE COMPANY TO EARTHWORKS ENTERTAINMENT, INC.

            For            Against      Abstain
         25,937,500         26,480      111,150


                                      -7-
<PAGE>


                                     PART II

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

     (A)   MARKET PRICES OF COMMON STOCK

The primary market for our common stock is the Nasdaq OTC Bulletin Board, where
it trades under the symbol "EWKE". The Company became publicly traded as "MVPI"
on June 28, 1999, when we were called Media Vision Productions, Inc. through a
merger with Gulfstar Industries, Inc., formerly known as Tier Environmental
Services, Inc. On October 1, 1999 the Company's name changed to eContent and its
symbol became "ETNT". Effective November 24, 2003 the Company changed its name
to Earthworks Entertainment, Inc. and its symbol became EWKE. The following
table sets forth the high and low closing bid prices for the shares for the
periods indicated as provided by the NASD's OTCBB System. The quotations shown
reflect inter-dealer prices, without retail mark-up, mark-down, or commission
and may not represent actual transactions.

                                HIGH BID     LOW BID

FISCAL YEAR ENDED SEPTEMBER 30, 2002
  First Quarter                 $   .23     $   .03
  Second Quarter                $   .20     $   .06
  Third Quarter                 $   .54     $   .04
  Fourth Quarter                $   .30     $   .04

FISCAL YEAR ENDED SEPTEMBER 30, 2003
  First Quarter                 $   .07     $   .04
  Second Quarter                $   .09     $   .02
  Third Quarter                 $   .09     $   .03
  Fourth Quarter                $   .40     $   .04

FISCAL YEAR ENDED SEPTEMBER 30, 2004
  First Quarter                 $   .31     $   .14
  Second Quarter                $   .29     $   .15
  Third Quarter                 $   .27     $   .15
  Fourth Quarter                $   .21     $   .14


     (B)   SHAREHOLDERS

As of November 4, 2004, the Company had 65,730,863 shares of common stock
outstanding and approximately 1,000 stockholders of record.

     (C)   DIVIDENDS

The Company has never declared or paid any cash dividends on our common stock
and do not anticipate paying any cash dividends in the foreseeable future. The
Company currently intends to retain future earnings, if any, to finance
operations and the expansion of our business. Any future determination to pay
cash dividends will be at the discretion of the board of directors and will be
based upon our financial condition, operating results, capital requirements,
plans for expansion, restrictions imposed by any financing arrangements and any
other factors that the board of directors deems relevant.


                                      -8-
<PAGE>


ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND PLAN OF
         OPERATIONS.

The following is management's discussion and analysis of certain significant
factors which have affected the Company's financial position and operating
results during the periods included in the accompanying financial statements, as
well as information relating to the plans of the Company's current management.

FORWARD-LOOKING STATEMENTS

This report contains "forward-looking statements". In some cases, you can
identify forward-looking statements by terms such as "may," "intend," "might,"
"will," "should," "could," "would," "expect," "believe," "estimate," "predict,"
"potential," or the negative of these terms and similar expressions intended to
identify forward-looking statements. These statements reflect the Company's
current views with respect to future events and are based on assumptions and
subject to risks and uncertainties. These risks and uncertainties may cause the
Company's actual results, performance, or achievements to be materially
different from any future results, performance, or achievements expressed or
implied by the forward-looking statements. You should not place undue reliance
on these forward-looking statements. Also, these forward-looking statements
represent the Company's estimates and assumptions as of the date of this report.
The Company is under no duty to update any of the forward-looking statements
after the date of this report to conform such statements to actual results or to
changes in our expectations.


RESULTS OF OPERATIONS

YEAR ENDED SEPTEMBER 30, 2004 VS. YEAR END SEPTEMBER 30, 2003

     The Company has not yet recorded any revenue since inception, as restated
for the termination of its investment in MPI. The Company recorded a net loss of
$2,365,315 for the year ended September 30, 2004 as compared to a loss of
$1,325,452 for the period September 30, 2003. This represents a loss per common
share of $(.04) for the year ended September 30, 2004 on basic and diluted
shares outstanding of 56,509,683 as compared to a loss per common share of
$(.04) on basic and diluted shares outstanding of 34,208,279 for the period
September 30, 2003.

     Production expenses were $125,233 for fiscal 2004 compared to $145,106 in
fiscal 2003. These included no non-cash charges for production services paid
with equity in 2004 and 2003. The company is currently in production of its
Z-Force property and expects that production costs will increase during fiscal
2005.

     General and administrative expenses were $1,017,859 in fiscal 2004, an
increase from $736,773 in fiscal 2003 despite a decrease in non-cash charges for
administrative services paid with equity of $0 in 2004 as compared to $651,983
in 2003. The increase in these costs primarily relate the marketing, development
and legal expenses related to the development of its Z-Force property, and, an
increase to executive compensation.

     Other operating expenses totaled $83,820 in 2004 as compared to $412,676 in
2003 which consisted of:

     Interest expense increased from $30,897 in 2003 to $1,090,234 in 2004. This
increase is attributed to the convertible bridge financing the Company secured
during the year ended September 30, 2004, including $1,000,000 associated with
the beneficial conversion features of convertible notes and $47,066 associated
with warrants issued to the note holders. Losses on settlements of debt of
$216,480 in 2003 decreased to $122,370 in 2004. The decrease is due to the fact
that in 2003 the Company incurred one-time charges of $94,000 in connection with
the terminated merger with Angel Babies, LLC and approximately $80,000
associated with the Company's settlement with MPI and Robert Marty. Settlement
charges in 2004 relate to the settlement of bridge notes which were converted
into common stock during the year. In 2003, the Company recorded an Impairment
loss of $161,589 which was associated primarily with the write down of long-term
projects, including approximately $50,000 in the Company's National Licensing
Corporation subsidiary and approximately $111,000 associated with the write down
of the residual value ascribed to the MPI production agreement and corresponding
deferred charges on projects the Company no longer intends to go forward with as
it plans on focusing on its new show properties. The Company did not record an
Impairment loss during 2004.


                                       -9-
<PAGE>


PLAN OF OPERATIONS AND BUSINESS STRATEGY

     The global market demand for high quality, character driven children and
family entertainment has never been greater. The proliferation of new digital,
satellite and cable broadcast networks throughout the world has prompted
industry analysts to predict that the demand for world class children's and
family entertainment properties will increase exponentially over the next
decade. Merchandising, licensing, publishing and other areas of marketing for
character driven hit entertainment properties can generate hundreds of millions
of dollars for the rights holders and tens of millions of dollars for the
companies who actually market the properties.

     Earthworks Entertainment, Inc., is a vertically integrated marketing
company engaged in the creation, co-production, marketing and distribution of
high quality, world class children's and family oriented entertainment
properties. The properties are marketed in all multi-platform areas of
commercial exposition ranging from Television to Home Video to Merchandise
Licensing to Electronic & Video Games to Book and Music Publishing.

     The Company also forms Teaming Agreements with outside companies for the
co-operative marketing of hit potential entertainment properties. The Company is
establishing an artistic & commercial `bridge' between producers, TV
broadcasters, publishing companies and merchandise groups in North America,
Europe and Asia. The establishment of such `bridge' relationships among
entertainment entities, who otherwise would not be able to globally expand their
world market share in such a near horizon timeframe, will ensure that the
Company is privy to substantial `first look/first option' opportunities on a
wide array of world class entertainment properties.

     On June 15, 2003 the Company appointed Peter Keefe as the Company's
President. Management considered that Mr. Keefe's network of global contacts,
associations and affiliations in the children's and family entertainment and
licensing industries would connect the Company with a uniquely broad, and
extremely valuable, base of exciting revenue generating marketing opportunities.
At that time, the Company began to establish its current platform to launch
properties and products in the global television, home video/DVD and merchandise
licensing marketplace. The Company began marketing of the Nine Dog Christmas,
Nine Dog Night of Fright and Z-Force animated entertainment properties. On
December 31, 2003, the Company's Board of Directors approved an agreement with
Peter Keefe, the Company's president, pursuant to a deal memorandum dated
December 1, 2003, which was intended to be binding and subject to definitive
agreements. Effective April 26, 2004, in exchange for the issuance of 10,000,000
restricted shares of the Company's common stock valued at $2,000,000, Mr. Keefe
executed an agreement whereby the Company has acquired rights to certain
properties which are allocated as follows:


                                      -10-
<PAGE>


Rights Acquired                                 Property Name      $ Allocation

Profit Participation Ownership                  Z-Force                 45%

Global Management & Control of TV & Home
 Video/DVD Sales, Toys and Merchandise
  Licensing, Distribution, Production and
  all Related Activities                        Z-Force                100%

 TOTAL Z-FORCE $ ALLOCATION                     $1,700,000
                                                 ---------
Gross Royalty Revenue from all World Wide
  Merchandise Licensing Activities              Nine Dog Property       10%

Gross Royalty Revenue from any Toy &
  Licensing Deals negotiated by Earthworks      Nine Dog Property       25%

Gross Royalty Revenue World Wide
  Home Video/DVD Sales                          Nine Dog Property       10%

 TOTAL NINE DOG $ ALLOCATION                       300,000
                                                  --------
Total                                           $2,000,000
                                                ==========


     The Company has not yet recorded any revenues. The properties that the
Company develops and targets for distribution and licensing are chosen to
provide the greatest probability for success across multi-platform market
categories. These market sectors include the following:

Television (pay, free, cable & satellite)     School Supplies
Home Video/DVD                                Educational Licensing
Merchandise Licensing                         Music & Book Publishing
Toys & Video Games                            Direct Marketing (to retail chains
Apparel                                       & through catalogues)
Theme Park Licensing                          Internet Applications
Fast Food Promotions                          Gifts & Novelties

     The Company has established a platform to launch its properties and
products in the global television and merchandise licensing marketplace. The
Company is currently marketing the Nine Dog Christmas, Nine Dog Night of Fright
and Z-Force animated entertainment properties and is in negotiations to secure
further, future properties that it calculates have a high potential for success.
The Company also has valuable and unique relationships with leading production,
distribution and licensing groups in the global entertainment market. The
Company has built working alliances with several outside production studios and
talent pools and the Company has identified several projects it plans to
implement on a property by property basis during fiscal 2005 and beyond.


                                      -11-
<PAGE>


     LIQUIDITY AND CAPITAL RESOURCES

     The Company's working capital at September 30, 2004 was in a deficit
position of $1,296,190. Since the reorganization, the Company has funded its
operations from the issuance of common stock and loans from officers and certain
shareholders. The Company has incurred operating losses totaling $16,066,722
from inception April 1, 1998 through September 30, 2004. The Company's ability
to continue as a going concern and its future success is dependent upon its
ability to raise capital in the near term to:

(1)  satisfy its current obligations,
(2)  continue its development of properties and projects, and
(3)  successfully implement its plans to market the properties and projects.

     The Company believes that it will be able to complete the necessary steps
in order to meet its cash flow requirements throughout fiscal 2004 and continue
its development and commercialization efforts. Management's plans in this regard
include, but are not limited to, the following:

(1)  The Company presently has ongoing negotiations with a number of financing
alternatives, including obtaining working capital from the proceeds of
convertible bridge notes and private placements of the Company's equity
including its common stock and warrants. The Company also plans to settle prior
obligations with equity and extended payment terms. The Company believes that
any of the above, or a combination thereof, will be successfully closed in an
orderly fashion and provide the necessary working capital, to maintain the
current visibility and development of its show properties, until such time the
Company can obtain cash flow from revenues and ultimately attain profitable
operations.

(2)  In addition to the above financing activities, the following business
initiatives are also ongoing and are expected to provide additional working
capital to the Company:

     (A) On June 15, 2003 appointed Peter Keefe as the Company's President.
Management believes Mr. Keefe's network of global contacts, associations and
affiliations in the children's and family entertainment and licensing industries
will connect the Company with a uniquely broad, and extremely valuable, base of
exciting revenue generating marketing opportunities. On December 31, 2003, the
Company's Board of Directors approved an agreement with Peter Keefe, the
Company's president, pursuant to a deal memorandum dated December 1, 2003, which
was intended to be binding and subject to definitive agreements whereby in
exchange for the issuance of 10,000,000 restricted shares of the Company's
common stock (or an equivalent value of both common stock and warrants to
purchase shares of common stock-based upon the Company's share price as of
December 1, 2003; which was $.20, or the equivalent at the time, of
approximately $2,000,000) to acquire the rights to certain entertainment
properties. On January 20, 2004, the Company executed a definitive agreement and
acquired the rights to certain properties, including direct profit
participation, sales and marketing rights, merchandise licensing rights, home
video distribution and television distribution rights in connection with the
Nine Dog and Z-Force animated show properties.

     (B) The Company has established a platform to launch properties and
products in television and merchandise licensing sales, and marketing of the
Nine Dog Christmas, Nine Dog Night of Fright and Z-Force animated show
properties and also has relationships with leading production, distribution and
licensing groups. The Company has built working alliances with several outside
production studios and talent pools and the Company has identified several
projects it plans to implement on a property by property basis during fiscal
2004 and beyond.

     Management believes that actions presently being taken to complete the
Company's development stage through the successful production, licensing and
distribution of children's and family entertainment properties will ultimately
generate sufficient revenue to support its operations. However, there can be no
assurance that Earthworks Entertainment will generate sufficient revenues to
provide positive cash flows from operations or that sufficient capital will be
available, when required, to permit the Company to realize its plans.

INFLATION

     The rate of inflation has had little impact on the Company's results of
operations and is not expected to have a significant impact on continuing
operations.


                                      -12-
<PAGE>


ITEM 7. FINANCIAL STATEMENTS.

(a)(1) The following documents are filed as part of this report:

Consolidated Financial Statements of the Registrant,
  Earthworks Entertainment, Inc. and Subsidiaries                  PAGES

Report of Rosenberg, Rich, Baker & Berman                           F-1

Consolidated Balance Sheet of Earthworks Entertainment, Inc.
 and Subsidiaries as of September 30, 2004                          F-2

Consolidated Statements of Operations of Earthworks
 Entertainment, Inc. and Subsidiaries for the years
 ended September 30, 2004 and September 30, 2003
 and for the period from inception (April 1, 1998)
 through September 30, 2004 (Unaudited as to period
 prior to October 1, 2003)                                          F-3

Consolidated Statements of Changes in Stockholders' Equity
 of Earthworks Entertainment, Inc. and Subsidiaries for the
 period from October 1, 1997 to September 30, 2004 (Unaudited
 as to period prior to October 1, 2003)                             F-4

Consolidated Statements of Cash Flows of Earthworks
 Entertainment, Inc. and Subsidiaries for the years ended
 September 30, 2004 and September 30, 2003 and for the period
 from inception(April 1, 1998) through September 30, 2004
 (Unaudited as to period prior to October 1, 2003)                 F-10

Notes to Consolidated Financial Statements                         F-11

b. Interim Financial Statements.

     Not Applicable

c. Financial Statements of Businesses Acquired and to be Acquired.

     Not Applicable


                                      -13-
<PAGE>


                        REPORT OF INDEPENDENT REGISTERED
                             PULIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Earthworks Entertainment, Inc. and
Subsidiaries

     We have audited the accompanying consolidated balance sheet of Earthworks
Entertainment, Inc. (formerly eContent, Inc.)(a Delaware Corporation in the
development stage) and Subsidiaries as of September 30, 2004 and the related
consolidated statements of operations and cash flows for the year then ended and
from April 1, 1998 (Date of Inception) through September 30, 2004 and the
consolidated statement of stockholders' equity from October 1, 1997 through
September 30, 2004 in the accompanying index to the financial statements (Item
7.). 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 audits. We did not audit the financial statements of
Earthworks Entertainment, Inc. for the period from inception to September 30,
2003. Such amounts are included in the cumlulative from inception to September
30, 2004 totals of the statement of operations, changes in stockholders' equity
and cash flows and reflect total net loss of 91 percent of the related
cumulative totals. Those statements were audited by other auditors whose report
has been furnished to us an our opinion, insofar as it relates to amounts for
the period from inception to September 30, 2003, included in the cumulative
totals, is based solely upon the report of the other auditors.


     We conducted our audit in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
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 Earthworks Entertainment,
Inc. and Subsidiaries as of September 30, 2004, and the results of operations
and its cash flows for the year then ended and from April 1, 1998 (Date of
Inception) through September 30, 2004 in conformity with accounting principles
generally accepted in the United States of America.

     The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
consolidated financial statements, the Company has suffered recurring losses
from operations and is in a working capital deficit position that raises
substantial doubt about its ability to continue as a going concern. Management's
plans concerning these matters are also described in Note 2. The consolidated
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.




ROSENBERG RICH BAKER BERMAN & COMPANY
Bridgewater, NJ

December 30, 2004

                                       F-1


<PAGE>


                 Earthworks Entertainment, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                           CONSOLIDATED BALANCE SHEET
                               SEPTEMBER 30, 2004

      ASSETS

Current Assets:
  Cash                                                             $    142,734
                                                                   ------------

     Total Current Assets                                               142,734
                                                                   ------------

Deferred production costs                                                  --
                                                                   ------------

Property and equipment, net of accumulated
    depreciation of $96                                                   1,054

Other Assets:
  Other Assets                                                           19,866
  Intangible assets, net of accumulated
    amortization of $90,481                                           2,000,000
                                                                   ------------

      Total Other Assets                                              2,019,866
                                                                   ------------

      Total Assets                                                    2,163,654
                                                                   ============


LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current Liabilities:
  Accounts payable and accrued expenses                                 271,173
  Convertible Promissory Notes                                          800,000
  Convertible Promissory Notes, officers                                200,000
  Other current liabilities                                             167,750
                                                                   ------------

      Total Current Liabilities                                       1,438,924
                                                                   ------------

Other Liabilities                                                        72,375
                                                                   ------------

Bridge loans expected to convert to equity                               59,000
                                                                   ------------

Stockholders' Equity:
  Common stock, par value $.0015 per share; authorized
   100,000,000 shares, 65,730,863 issued and outstanding
  Convertible preferred stock, authorized 1,000,000 shares,
    par value $10.00; no shares issued and outstanding                   95,022
  Additional paid in capital                                         16,565,055
  Deficit accumulated during development stage                      (16,066,722)
                                                                   ------------

      Total Stockholders' Equity (Deficit)                              593,355
                                                                   ------------

      Total Liabilities and Stockholders' Equity                   $  2,163,654
                                                                   ============

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

                                       F-2


<PAGE>

<TABLE>
<CAPTION>
                       Earthworks Entertainment, INC. AND SUBSIDIARIES
                                (A DEVELOPMENT STAGE COMPANY)
                            CONSOLIDATED STATEMENTS OF OPERATIONS
                                                                              FROM APRIL 1,
                                                                                  1998
                                                                               (DATE OF
                                                                               INCEPTION)
                                                   FOR THE YEARS ENDED             TO
                                                       September 30,          September 30,
                                                   2003            2004           2004
                                                (Unaudited)                    (Unaudited)
                                                -----------    ------------   ------------
<S>                                             <C>            <C>            <C>
Total Revenues                                  $      --      $       --     $       --
                                                -----------    ------------   ------------

Direct Costs and Expenses:
  Development, production and distribution
     including non-cash stock related charges
     of $0, $0 and $916,056 respectively            145,106         125,233      2,527,745
  General and administrative including
     non-cash charges of $651,983 $0
     and $2,855,072                                 736,773       1,017,859     11,047,108
  Depreciation and amortization                      30,897          10,695        139,093
                                                -----------    ------------   ------------
  Stock based compensation and stock grants               0               0              0
                                                -----------    ------------   ------------

      Total Costs and Expenses                      912,776       1,153,786     13,713,945
                                                -----------    ------------   ------------

  Loss from operations before other expenses
    and provisions for income taxes                (912,776)     (1,153,786)   (13,713,945)
                                                -----------    ------------   ------------

Other Operating Income (Expense):
  Interest income                                      --             1,075          2,741
  Settlement gains (losses)                        (216,480)       (122,370)       896,259
  Interest expense (net)                            (34,607)     (1,090,234)    (1,201,060)
  Equity in earnings of unconsolidated
    Subsidiary                                         --              --           96,774
  Loss from termination of interest in
    unconsolidated subsidiary                          --              --       (1,985,901)
   Impairment Loss                                 (161,589)              0       (161,589)
                                                -----------    ------------   ------------

      Total Other Operating Income (Expense)       (412,676)     (1,211,529)    (2,352,776)

  Operating (Loss) before income taxes           (1,325,452)     (2,365,315)   (16,066,722)

  Provision for income taxes                              0               0              0
                                                -----------    ------------   ------------

      Net (Loss)                                $(1,325,452)   $ (2,365,315)   (16,066,722)
                                                ===========    ============   ============


Loss per common share, basic and diluted        $     (0.04)   $      (0.04)
                                                ===========    ============

Weighted average common shares outstanding,
  basic and diluted                              34,208,279      56,509,683
                                                ===========    ============
</TABLE>


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

                                       F-3


<PAGE>


<TABLE>
<CAPTION>
                                 EARTHWORKS ENTERTAINMENT, INC. AND SUBSIDIARIES
                                          (A DEVELOPMENT STAGE COMPANY)
                       CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
                                    FROM OCTOBER 1, 1997 TO SEPTEMBER 30, 2004
                                (Unaudited as to period prior to October 1, 2003)

                                                                         ADDITIONAL      TOTAL
                                        COMMON STOCK        DEFERRED      PAID IN      (RETAINED     STOCKHOLDERS'
                                    SHARES        AMOUNT  COMPENSATION    CAPITAL       DEFICIT)        EQUITY
<S>                             <C>            <C>          <C>         <C>           <C>           <C>
Balance, October 1, 1997            398,045    $ 318,436        --      $ (318,436)   $   (86,099)  $   (86,099)
Change of par value from
 $.80 to $.08                          --       (286,592)       --         286,592           --            --
Retroactive effect of
 recapitalization on
 January 4, 1999
 including the
 elimination of prior
 retained deficit                 4,000,000      320,000        --        (320,000)        86,099         6,099
                                -----------    ---------    --------    ----------    -----------   -----------

 Balance as restated for
 recapitalization
 effective April 1, 1998          4,398,045    $ 351,844        --      $ (351,844)   $      --     $      --
Issuance of common stock,
 in private placement,
 net of offering costs
 of $14,011                         255,000       20,400        --         220,589           --         240,989
Correction of predecessor
 shares canceled in
 reverse split and
 cancellation of
 indebtedness                        (2,836)        (227)       --             227           --            --
Net loss for the period
 from April 1, 1998
 (date of inception) to
 September 30, 1998                    --           --          --            --         (141,759)     (141,759)
                                -----------    ---------    --------    ----------    -----------   -----------

Balance, September 30, 1998,
as restated                       4,650,209      372,017        --        (131,028)      (141,759)       99,230
Issuance of common stock
 in connection with the
 extension of note
 payable                            500,000       40,000        --         (15,000)          --          25,000
Issuance of common stock
 in private placements,
 net of offering costs
 of $62,472                         912,500       73,000        --         776,028           --         849,028
Issuance of common stock
 in consideration for
 cancellation of note
 payable plus accrued
 interest                           500,000       40,000        --         227,500           --         267,500
Issuance of common stock
 to employees for
 services                         3,400,000      272,000        --       2,754,000           --       3,026,000
Issuance of stock options
 to employees                          --           --       (88,333)      106,000           --          17,667
Net loss for the year
 ended September 30, 1999              --           --          --            --       (3,942,234)   (3,942,234)
                                -----------    ---------    --------    ----------    -----------   -----------
Balance at September 30, 1999     9,962,709    $ 797,017    $(88,333)   $3,717,500    $(4,083,993)  $   342,191
                                -----------    ---------    --------    ----------    -----------   -----------
</TABLE>

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

                                       F-4


<PAGE>

<TABLE>
<CAPTION>
                                  EARTHWORKS ENTERTAINMENT, INC. AND SUBSIDIARIES
                                           (A DEVELOPMENT STAGE COMPANY)
                       CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
                                    FROM OCTOBER 1, 1997 TO SEPTEMBER 30, 2004
                                 (Unaudited as to period prior to October 1, 2003)

                                                                         ADDITIONAL      TOTAL
                                     COMMON STOCK          DEFERRED       PAID IN      (RETAINED    STOCKHOLDERS'
                                  SHARES       AMOUNT    COMPENSATION     CAPITAL       DEFICIT)        EQUITY
<S>                            <C>         <C>           <C>            <C>           <C>            <C>
Balance at October 1, 1999     9,962,709   $   797,017   $   (88,333)   $ 3,717,500   $(4,083,993)   $   342,191
Shares issued in
 consideration for
 cancellation of
 officer loans                   805,424        64,434          --          740,990          --          805,424
Issuance of shares in
 connection with
 investment in MPI
 subsidiary                    1,350,000       108,000          --        4,042,000          --        4,150,000
Issuance of stock
 options to employee of
 subsidiary                         --            --            --          368,750          --          368,750
Exercise of stock
 options                         500,000        40,000          --           60,000          --          100,000
Issuance of common stock
 for services                  1,135,000        90,800          --        1,801,952          --        1,892,752
Issuance of shares in
 private placement,
 together with warrants,
 net of cash offering
 costs of $184,975             3,437,181       274,974          --        1,811,706          --        2,086,680
Shared issued for cash
 and guarantee of
 acquisition note                400,000        32,000          --          118,000          --          150,000
Amortization of deferred
 compensation                       --            --          35,333           --            --           35,333
Net Loss for the year
 ended September 30,
 2000                               --            --            --             --      (3,595,192)    (3,595,192)
                             -----------   -----------   -----------    -----------   -----------    -----------

Balance, September 30,
 2000                         17,590,314   $ 1,407,225   $   (53,000)   $12,660,898   $(7,679,185)   $ 6,335,938
                             -----------   -----------   -----------    -----------   -----------    -----------
</TABLE>


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


                                       F-5


<PAGE>

<TABLE>
<CAPTION>
                                     EARTHWORKS ENTERTAINMENT, INC. AND SUBSIDIARIES
                                              (A DEVELOPMENT STAGE COMPANY)
                          CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
                                       FROM OCTOBER 1, 1997 TO SEPTEMBER 30, 2004
                                    (Unaudited as to period prior to October 1, 2003)

                                                                             ADDITIONAL       TOTAL
                                       COMMON STOCK            DEFERRED       PAID IN       (RETAINED      STOCKHOLDERS'
                                  SHARES          AMOUNT     COMPENSATION     CAPITAL        DEFICIT)         EQUITY
<S>                             <C>           <C>             <C>             <C>             <C>             <C>
Balance, September 30, 2000
                                17,590,314    $  1,407,225    $ (53,000)   $ 12,660,898    $ (7,679,185)   $  6,335,938

Issuance of shares in
 private placement,
 together with warrants,
 net of cash offering
 costs of $130,018               1,469,575         117,566         --           352,416            --           469,982
Exercise of warrants and
 issuance of reparative
 shares, net of cash
 offering costs of $99,718       2,454,975         196,398         --           834,964            --         1,031,362
Issuance of shares in
 private placement                 100,000           8,000         --            32,000            --            40,000
Issuance of common
 stock for production
 rights                            100,000           8,000         --           104,500            --           112,500
Amortization of deferred
 compensation                         --              --         25,999            --              --            25,999
Return of shares pursuant
 to settlement agreement
 with certain management        (1,675,688)       (134,055)        --        (1,273,489)           --        (1,407,544)
Cancellation of options
 pursuant to settlement
 agreement with certain
 management                           --              --         27,001         (27,001)           --              --
Return of shares in
 connection with
 termination of stock
 purchase agreement,
 effective July 30, 2001        (1,350,000)       (108,000)        --        (4,042,000)           --        (4,150,000)
Issuance of shares in
 settlement                         91,833           7,347         --             6,428            --            13,775
Issuance of shares to
 directors to cancel debt
 and accrue compensation         1,442,563         115,405         --              --              --           115,405
Issuance of common stock
 for services                    1,970,000         157,600         --           336,030            --           493,630
Net loss for the year
 ended September 30, 2001             --              --           --              --        (3,118,454)     (3,118,454)
                              ------------    ------------    ---------    ------------    ------------    ------------
Balance, September 30, 2001     22,193,572    $  1,775,486    $    --      $  8,984,746    $(10,797,639)   $    (37,407)
                              ------------    ------------    ---------    ------------    ------------    ------------
  </TABLE>

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


                                       F-6


<PAGE>

<TABLE>
<CAPTION>
                                   EARTHWORKS ENTERTAINMENT, INC. AND SUBSIDIARIES
                                            (A DEVELOPMENT STAGE COMPANY)
                        CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
                                     FROM OCTOBER 1, 1997 TO SEPTEMBER 30, 2004
                                 (Unaudited as to period prior to October 1, 2003)

                                                                         ADDITIONAL      TOTAL
                                      COMMON STOCK         DEFERRED       PAID IN      (RETAINED      STOCKHOLDERS'
                                  SHARES         AMOUNT  COMPENSATION     CAPITAL       DEFICIT)         EQUITY
<S>                             <C>          <C>            <C>        <C>            <C>             <C>
Balance, September 30, 2001     22,193,572   $  1,775,486   $ --       $  8,984,746   $(10,797,639)   $    (37,407)

Issuance of Warrants
   in Production Contract             --             --       --            235,200           --           235,200

Issuance of Shares in
   Settlement                      400,000         32,000     --             67,000           --            99,000

Issuance of Shares in
   Settlement Note                 100,000          8,000     --             12,000           --            20,000

Issuance of Shares for
   Compensation                  2,050,000        164,000     --            122,000           --           286,000

Issuance of Shares for
   Services                      1,245,000         99,600     --            374,250           --           473,850

Net loss for the year ended
   September 30, 2002                 --             --       --               --       (1,578,316)     (1,578,315)
                              ------------   ------------   ------     ------------   ------------    ------------
Balance, September 30, 2002     25,988,572   $  2,079,086   $ --       $  9,795,196   $(12,375,955)   $   (501,672)
                              ============   ============   ======     ============   ============    ============
</TABLE>






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


                                       F-7


<PAGE>

<TABLE>
<CAPTION>
                                   EARTHWORKS ENTERTAINMENT, INC. AND SUBSIDIARIES
                                            (A DEVELOPMENT STAGE COMPANY)
                         CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
                                      FROM OCTOBER 1, 1997 TO SEPTEMBER 30, 2004
                                  (Unaudited as to period prior to October 1, 2003)
                                                                          ADDITIONAL      TOTAL
                                        COMMON STOCK         DEFERRED      PAID IN      (RETAINED      STOCKHOLDERS'
                                    SHARES         AMOUNT  COMPENSATION    CAPITAL       DEFICIT)         EQUITY
<S>                             <C>             <C>            <C>      <C>            <C>             <C>
Balance, September 30, 2002       25,988,572   $  2,079,086    $ --     $  9,795,196   $(12,375,955)   $   (501,672)


Adjustment to reflect amended
   Par Value as revised from
    From $.08 to $.0015                 --     $ (2,040,103)   $ --     $  2,040,103   $       --      $       --
                                ------------   ------------    ------   ------------   ------------    ------------


Balance, October 1, 2002          25,988,572   $     38,983    $ --     $ 11,835,299   $       --      $       --

Issuance of Shares to
   Cancel Production Contract
   And retire warrants               125,000            188      --           36,062           --            36,250

Issuance of Shares to
   Convert Bridge Notes              458,333            687      --           43,647           --            44,334

Issuance of Shares to
   Cancel Unpaid Compensation
   And Professional Fees          10,675,000         16,013      --          214,887           --           230,900

Issuance of Shares for
   Reparations                       750,000          1,125      --           13,875           --            15,000

Issuance of Shares to
   Settle License Fees             1,200,000          1,800      --          106,200           --           108,000

Issuance of shares @ $.03
   Per share in Private
   Placements                      1,433,333          2,150      --           42,850           --            45,000

Issuance of shares @ $.08
   Per share in Private
   Placements                        625,000            938      --           49,062           --            50,000

Issuance of shares @ $.10
   Per share in Private
   Placements, net of cash
   offering costs of $46,006       1,637,500          2,456      --          115,288           --           117,744

Issuance of shares to
   Settle $50,000 loan and
   collateral in connection
   with cancelled merger
   agreement                       2,400,000          3,600      --          140,400           --           144,000

Issuance of Shares for
   Employment Agreement
   With President                  3,000,000          4,500      --          205,500           --           210,000

Net loss for the year ended
   September 30, 2003                   --             --        --             --       (1,325,451)     (1,325,451)
                                ------------   ------------    ------   ------------   ------------    ------------
Balance, September 30, 2003       48,292,738   $     72,440    $ --     $ 12,803,070   $(13,701,406)   $   (825,895)
</TABLE>




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

                                       F-8


<PAGE>

<TABLE>
<CAPTION>
                                EARTHWORKS ENTERTAINMENT, INC. AND SUBSIDIARIES
                                         (A DEVELOPMENT STAGE COMPANY)
                      CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
                                   FROM OCTOBER 1, 1997 TO SEPTEMBER 30, 2004
                                (Unaudited as to period prior to October 1, 2003)
                                                                    ADDITIONAL      TOTAL
                                     COMMON STOCK      DEFERRED      PAID IN      (RETAINED     STOCKHOLDERS'
                                  SHARES      AMOUNT COMPENSATION    CAPITAL       DEFICIT)        EQUITY
<S>                            <C>          <C>      <C>          <C>            <C>            <C>
Issuance of shares for
   services                       625,000   $    938     --       $    106,062           --      $    107,000

Issuance of shares @ $.08
   Per share in Private
   Placements                   2,100,000      3,150     --            166,850           --           170,000

Issuance of shares to
   Company President for
   License Rights              10,000,000     15,000     --          1,985,000           --         2,000,000

Issuance of shares @ $.15
   Per share, exercise of
   Warrants                       180,000        270     --             21,730           --            22,000

Issuance of shares to
   Settle bridge notes
   And accrued interest         1,050,000      1,575     --            215,925           --           217,500

Issuance of shares to
   Settle defaulted note
   And accrued interest           200,000        300     --             39,700           --            40,000

Issuance of Shares to
   Cancel Unpaid Compensation
   And Professional Fees          900,000      1,350     --            214,887           --           199,250

Stock subscription receivable        --         --       --            (19,000)          --           (19,000)

Intrinsic value of beneficial
 conversion features of
 convertible notes charged to
 interest expense                    --         --       --          1,000,000           --         1,000,000

Amortization of debt issue costs
 associated with warrants issued
 to note holders                     --         --       --             47,066           --            47,066

Net loss for the year ended
   September 30, 2004                --         --       --               --       (2,365,315)     (2,365,315)
                             ------------   --------   ------     ------------   ------------    ------------
Balance, September 30, 2004    63,347,738   $ 95,022   $ --       $ 16,565,055   $(16,066,722)   $    593,355
                             ============   ========   ======     ============   ============    ============
</TABLE>



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

                                      F-9


<PAGE>

<TABLE>
<CAPTION>

                         EARTHWORKS ENTERTAINMENT, INC. AND SUBSIDIARIES
                                  (A DEVELOPMENT STAGE COMPANY)
                               CONSOLIDATED STATEMENTS OF CASH FLOW
                                                                                   FROM APRIL 1,
                                                                                        1998
                                                                                      (DATE OF
                                                                                     INCEPTION)
                                                       FOR THE YEARS ENDED              TO
                                                          SEPTEMBER 30,            SEPTEMBER 30,
                                                       2003            2004            2004
                                                   (Unaudited)                     (Unaudited)
                                                   ------------    ------------    ------------
<S>                                                <C>             <C>             <C>
Cash flows from operating activities:
  Net Loss                                         $ (1,325,451)   $ (1,318,249)   $(15,019,655)
  Adjustments to reconcile net loss to net cash
    used in operating activities:
    Depreciation and amortization                        30,897          10,695         139,093
    Interest expense paid with equity                      --                 0          17,500
    Loan fees                                              --                 0          25,000
    Loss on abandonment of equipment                       --            39,547          39,547
    Stock based compensation and expenses
      paid by stock                                     691,900         342,002       8,641,237
    Equity in earnings of unconsolidated subsidiary        --                 0         (96,774)
    Settlement income relating to stock                    --            27,400      (1,366,369)
    Loss on termination of interest in
    unconsolidated subsidiary                              --                 0       1,985,909
Changes in assets and liabilities:
  Deferred charges and other current assets             482,883           9,791         602,744
  Other liabilities                                     (39,558)         (2,025)        447,727
  Accounts payable and accrued expenses                 (22,987)        (28,822)        719,420
  Cash overdraft                                         (2,387)              0               0
                                                   ------------    ------------    ------------

    Net cash used in operating activities              (184,703)       (919,662)     (3,864,622)
                                                   ------------    ------------    ------------

Cash flows from investing activities:
  Investment in intangible assets                          --                 0         (90,481)
  Investment in property and equipment                     --            (1,150)        (68,528)
  Advance on production rights                             --                 0        (337,500)
  Investment in MPI                                        --                 0      (1,850,000)
                                                   ------------    ------------    ------------

    Net cash used in investing activities                     0          (1,150)     (2,346,509)
                                                   ------------    ------------    ------------

Cash flows from financing activities:
  Net proceeds from issuance of common stock            211,015         179,730       4,803,911
  Proceeds from loans                                    60,000         800,000       1,450,213
  Advances from officers and stockholders                  --                 0         400,954
  Repayment of loans                                       --            (2,500)       (301,213)
                                                   ------------    ------------    ------------

    Net cash provided by financing activities           271,015         977,230       6,353,865
                                                   ------------    ------------    ------------

Net increase (decrease)in cash and cash equivalents      86,312          56,418         142,734

Cash and cash equivalents, Beginning of Period                4          86,316
                                                   ------------    ------------    ------------

Cash and cash equivalents, End of Period           $     86,316    $    142,734    $    142,734
                                                   ============    ============    ============
</TABLE>

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

                                      F-10


<PAGE>


                 EARTHWORKS ENTERTAINMENT, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1-ORGANIZATION AND NATURE OF BUSINESS

         Earthworks Entertainment Inc.'s primary business is the creation,
co-production, marketing and distribution of high quality, world class
children's and family oriented entertainment properties. The properties are
marketed in all multi-platform areas of commercial exposition ranging from
Television to Home Video to Merchandise Licensing to Electronic & Video Games to
Book and Music Publishing.

         Earthworks Entertainment, Inc. (the "Company") was originally
incorporated under the laws of the State of Delaware on December 3, 1986 as
Flair Communications, Inc. On September 26, 1994, the Company acquired all of
the issued and outstanding shares of Tier Environmental Services, Inc. ("Tier of
Florida"), a Florida corporation. On September 29, 1994 the Company changed its
name to Tier Environmental Services, Inc. On September 27, 1995, the Company
entered into a merger and acquisition plan to acquire all the shares and assets
of Plant Technical Services, Inc. ("PTS"), an engineering and technical services
firm consulting to the power industry, located in Texas. In February 1996, the
Company changed its name to Gulfstar Industries, Inc.

         On January 4, 1999 the Company acquired all of the issued and
outstanding shares of Media Visions Properties, Inc. and changed its name to
Media Vision Productions, Inc. from Gulfstar Industries effective the same date.
This transaction was accounted for as a reverse merger. On October 1, 1999 the
Company changed its name to eContent, Inc.

         During the year ended September 30, 2000, the Company initially
recorded its investment in MPI as a consolidated subsidiary of ETNT pursuant to
a stock purchase agreement from May of 2000. Upon the acquisition of a 51%
interest in MPI at that time, the Company had a conditional option to acquire
the remaining 49% of MPI, with certain extensions through July 30, 2001. On July
30, 2001, Earthworks Entertainment let its right to complete the acquisition of
MPI expire, and subject to the return of certain shares, the Company forfeited
any interest in MPI. The Company restated its financial statements for the
fiscal year ended September 30, 2000 to record this investment as an
unconsoliated subsidiary in its filing for the fiscal year ended September 30,
2001 in which the Company recorded a loss on the termination of its investment
in MPI effective July 30, 2001. Subsequent to September 30, 2001, the Company
and MPI concurrently exchanged certain releases relating to the preceding and
entered into a preliminary program production agreement. On September 30, 2003,
the Company executed an agreement to terminate its preliminary production
agreement with MPI. As part of the agreement, the Company issued 125,000 shares
of its common stock to MPI and cancelled 1,400,000 warrants issued to MPI's
President, Robert Marty, as part of the initial production agreement.
Additionally, both parties agreed to cancel outstanding notes due to and from
Earthworks Entertainment, and again provide certain releases.

         On February 7, 2003 the Company entered into a conditional plan for a
corporate combination agreement to merge with Anglebabies LLC, a California
Limited Liability Company. The terms of the agreement provided for the Company
to receive 100% of all Anglebabies, LLC's interests; in exchange for which the
interest of the members of the limited liability company were to be issued
shares of Earthworks Entertainment common or preferred stock, totaling
approximately 80% of the value of the new combination. The number of shares to
be issued were subject to an adjustment after the issuance of a fairness
opinion. All terms and conditions of the agreement were subject to shareholder
approval. On June 13, 2003 the Company elected to not implement this agreement
and the proposed merger with Angel Babies, LLC was terminated.

       On June 15, 2003 appointed Peter Keefe as the Company's President.
Management considered that Mr. Keefe's network of global contacts, associations
and affiliations in the children and family entertainment and licensing
industries would connect the Company with a uniquely broad, and extremely
valuable, base of exciting revenue generating marketing opportunities. Mr. Keefe
was issued 3,000,000 shares of the Company's common stock in connection with his
employment agreement. On December 31, 2003, the Company's Board of Directors
approved an agreement with Peter Keefe, the Company's president, pursuant to a
deal memorandum dated December 1, 2003, which was intended to be binding and
subject to definitive agreements. Effective April 26, 2004, in exchange for the
issuance of 10,000,000 restricted shares of the Company's common stock valued at
$2,000,000, Mr. Keefe executed an agreement whereby the Company has acquired
rights to certain properties.



                                       F11
<PAGE>


                 EARTHWORKS ENTERTAINMENT, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 2-LOSSES DURING THE DEVELOPMENT STAGE AND MANAGEMENTS PLANS

         The Company's working capital at September 30, 2004 was a deficit of
$1,296,190. Since the reorganization, the Company has funded its operations from
the issuance of common stock and loans from officers and certain shareholders,
and through the issuance of convertible bridge notes. The Company has incurred
operating losses totaling $16,066,722 from inception April 1, 1998 through
September 30, 2003. The Company's ability to continue as a going concern and its
future success is dependent upon its ability to raise capital in the near term
to:

         (1)  satisfy its current obligations,
         (2)  continue its development of properties and projects, and
         (3)  successfully implement its plans to market the properties and
              projects.

         The Company believes that it will be able to complete the necessary
steps in order to meet its cash flow requirements throughout fiscal 2005 and
continue its development and commercialization efforts. Management's plans in
this regard include, but are not limited to, the following:

         (1) The Company presently has ongoing negotiations with a number of
         financing alternatives, including obtaining working capital from the
         proceeds of convertible bridge notes and private placements of the
         Company's equity including its common stock and warrants. The Company
         also plans to settle prior obligations with equity and extended payment
         terms. The Company believes that any of the above, or a combination
         thereof, will be successfully closed in an orderly fashion and provide
         the necessary working capital, to maintain the current visibility and
         development of its show properties, until such time the Company can
         obtain cash flow from revenues and ultimately attain profitable
         operations.

         (2) In addition to the above financing activities, the following
         business initiatives are also ongoing and are expected to provide
         additional working capital to the Company:

         A) On June 15, 2003 appointed Peter Keefe as the Company's President.
Management believes Mr. Keefe's network of global contacts, associations and
affiliations in the children's and family entertainment and licensing industries
will connect the Company with a uniquely broad, and extremely valuable, base of
exciting revenue generating marketing opportunities. On December 31, 2003, the
Company's Board of Directors approved an agreement with Peter Keefe, the
Company's president, pursuant to a deal memorandum dated December 1, 2003, which
was intended to be binding and subject to definitive agreements whereby in
exchange for the issuance of 10,000,000 restricted shares of the Company's
common stock (or an equivalent value of both common stock and warrants to
purchase shares of common stock-based upon the Company's share price as of
December 1, 2003; which was $.20, or the equivalent at the time, of
approximately $2,000,000) to acquire the rights to certain entertainment
properties. On January 20, 2004, the Company executed a definitive agreement and
acquired the rights to certain properties, including direct profit
participation, sales and marketing rights, merchandise licensing rights, home
video distribution and television distribution rights in connection with the
Nine Dog and Z-Force animated show properties.

         (B) The Company has established a platform to launch its properties and
products in the global television and merchandise licensing marketplace. The
Company is currently marketing the Nine Dog Christmas, Nine Dog Night of Fright
and Z-Force animated entertainment properties and is in negotiations to secure
further, future properties that it calculates have a high potential for success.
The Company also has valuable and unique relationships with leading production,
distribution and licensing groups in the global entertainment market. The
Company has built working alliances with several outside production studios and
talent pools and the Company has identified several projects it plans to
implement on a property by property basis during fiscal 2005 and beyond.

         Management believes that actions presently being taken to complete the
Company's development stage through the successful production, licensing and
distribution of children's and family entertainment properties will ultimately
generate sufficient revenue to support its operations. However, there can be no
assurance that Earthworks Entertainment, Inc. will generate sufficient revenues
to provide positive cash flows from operations or that sufficient capital will
be available, when required, to permit the Company to realize its plans.



                                      F-12


<PAGE>


                 EARTHWORKS ENTERTAINMENT, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

REORGANIZATION AND SUBSEQUENT RECAPITALIZATION

         In July 1997, the Company's predecessor, Gulfstar Industries, filed a
petition under Chapter 11 of the Bankruptcy laws. The Company's petition was
confirmed by the Bankruptcy Court on September 2, 1998 and became effective on
January 4, 1999. The Plan of Reorganization and confirmation of the same
included the acceptance of the agreement and merger plan between the Company and
Media Vision Properties, Inc., whereby holders of existing voting shares
immediately before the confirmation retain less than 50% of the voting shares of
the surviving entity and the post petition liabilities allowed and claims exceed
the carrying value of assets. On January 4, 1999, pursuant to the plan of
reorganization and plan of merger the Company changed its name to Media Vision
Productions, Inc. On October 1, 1999, the Company changed its name to eContent,
Inc.

         For accounting purposes the acquisition has been treated as an
acquisition of the Company by Media Vision Properties, Inc. and therefore a
recapitalization of Media Vision Properties, Inc. The historical financial
statements prior to January 4, 1999 are those of Media Vision Properties, which
was incorporated on June 17, 1997 but did not issue stock, have assets, or
commence operations until April 1, 1998. Additionally, proforma information is
not presented since the transaction is treated as a recapitalization.

PRINCIPLES OF CONSOLIDATION

         The accompanying consolidated balance sheet as of September 30, 2004
includes the accounts of the Company and its wholly owned subsidiary, Media
Vision Properties Inc., which commenced operations on April 1, 1998 and National
Licensing Corporation, which commenced operations on September 5, 2000.

         All significant intercompany accounts and transactions have been
eliminated.

RRECLASSIFICATION OF FINANCIAL STATEMENT PRESENTATION

         Certain reclassifications have been made to the 2000 financial
statements to conform with the 2001 financial statement presentation.

CASH AND CASH EQUIVALENTS

         For purposes of the statement of cash flows, cash equivalents include
time deposits, certificates of deposit, and all highly liquid debt instruments
with original maturities of three months or less.

FIXED ASSETS

         Fixed assets were stated at cost less accumulated depreciation.
Maintenance, repairs and minor replacements are charged to operations as
incurred; major replacements and betterments are capitalized. Depreciation of
fixed assets is provided on the straight-line method over estimated useful lives
of 5 to 7 years. The cost of assets sold or retired and related accumulated
depreciation are removed from the accounts at the time of disposition, and any
resulting gain or loss is reflected in income for the period.


LONG-LIVED ASSETS

         The Company accounts for long-lived assets under the provisions of SFAS
No. 121, "Accounting for the Impairment of Long-lived Assets and for Long-lived
Assets to Be Disposed of," which states that whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable and long-lived assets and certain identifiable intangibles are to be
disposed of, they should be reported at the lower of carrying amount or fair
value less cost to sell. The Company does not believe that any such changes in
circumstances have occurred.

                                      F-13


<PAGE>


                 EARTHWORKS ENTERTAINMENT, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Continued)

FINANCIAL INSTRUMENTS

         The following methods and assumptions were used by the Company to
estimate fair values of financial instruments as discussed herein:

         CASH AND CASH EQUIVALENTS: The carrying amount approximates fair value
because of the short period to maturity.

         ACCOUNTS PAYABLE AND ACCRUED EXPENSES: The carrying value of the
accounts payable and accrued expenses approximate their fair value.

INCOME TAXES

         The Company accounts for income taxes using the asset and liability
method. Under this method, deferred tax assets and liabilities are recognized
for the future tax consequences attributable to differences between the
financial statement carrying amounts of existing assets and liabilities and
their respective tax bases and operating loss and tax credit carry-forwards.
Deferred tax assets and liabilities are measured using currently enacted tax
rates. The effect on deferred tax assets and liabilities of a change in tax
rates is recognized in results of operations in the period that includes the
enactment date. Because of the uncertainty regarding the Company's future
profitability, the future tax benefits of its losses have been fully reserved
for. Therefore, no benefit for the net operating loss has been recorded in the
accompanying consolidated financial statements.

         Utilization of net operating losses generated through September 30,
2001 may be limited due to changes in ownership that occurred.

USE OF ESTIMATES

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

LOSS PER COMMON SHARE, BASIC AND DILUTED

         The Company accounts for net loss per common share in accordance with
the provisions of Statements of Financial Accounting Standards ("SFAS") No. 128,
"Earnings per Share" ("EPS"). SFAS No. 128 reflects the potential dilution that
could occur if securities or other contracts to issue common stock were
exercised or converted into common stock or resulted in the issuance of common
stock that then shared in the earnings of the entity. Common equivalent shares
have been excluded from the computation of diluted EPS since their effect is
anti-dilutive. The 1998 earnings per share were restated to reflect the 1 for 25
split pursuant to the plan of re-organization, and the 4,000,000 shares issued
in the merger accounted for as a reorganization were treated as outstanding
effective from the date of inception.


                                      F-14


<PAGE>


                 EARTHWORKS ENTERTAINMENT, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Continued)


SUPPLEMENTAL INFORMATION-STATEMENT OF CASH FLOWS
                           FOR THE YEARS ENDED
                               SEPTEMBER 30,
                            2003         2004
                          -------      -------

Interest Paid             $     0      $     0
                          =======      =======


SCHEDULE OF NON CASH INVESTING AND FINANCING ACTIVITIES:

                                                            FOR THE YEARS ENDED
                                                                SEPTEMBER 30,
                                                             2003         2004
                                                           --------     -------

Issuance of 3,000,000 and 625,000 shares of
  common stock for services                                $210,000    $107,000
                                                           ========   =========

Issuance of 10,000,000  shares of common stock to
 Company president for acquisition of rights to
 Certain entertainment properties                          $     --  $2,000,000
                                                           ========   =========

Issuance of 458,333 and 1,250,000 shares of common
 stock for repayment of loan and accrued interest
 and the conversion of Bridge Notes and accrued
 interest                                                  $ 44,334    $257,834
                                                           ========    ========

Issuance of 1,200,000 shares of common stock
  to settle outstanding licensing rights                   $108,000    $   --
                                                           ========    ========

Issuance of 125,000 shares of common stock
  to cancel production agreement and warrants              $ 36,250    $   --
                                                           ========    ========

Issuance of 750,000 shares of common stock
  to investor as reparation                                $ 15,000    $   --
                                                           ========    ========

Issuance of 2,400,000 shares of common stock
  to settle $50,000 loan and collateral, in
  connection with cancelled merger agreement               $144,000    $   --
                                                           ========    ========

Issuance of 500,000 shares of common stock to two
  Officers to settle unpaid expenses and compensation
   Due from a prior settlement                             $     --    $103,196
                                                           ========    ========

Interest expense and corresponding credit to
  additional paid in capital pursuant to EITF 98-5         $     --  $1,047,066
                                                           ========  ==========

                                      F-15


<PAGE>


                 EARTHWORKS ENTERTAINMENT, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Continued)

ORGANIZATIONAL COSTS

         Costs incurred by the Company and liabilities assumed in the
acquisition of the Company accounted for as a recapitalization of Media Vision
Properties, Inc. have been capitalized at historical cost. Amortization is
computed using the straight line method over the estimated life of 60 months.

         Amortization expense was $19,672 and $0 for the years ended September
30, 2003 and 2004, respectively.

STOCK-BASED COMPENSATION

         Financial Accounting Statement No. 123, Accounting for Stock Based
Compensation, encourages, but does not require companies to record compensation
cost for stock-based employee compensation plans at fair value. The Company has
chosen to continue to account for stock-based compensation using the intrinsic
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. The Company has adopted the
"disclosure only" alternative described in SFAS 123 and SFAS 148, which require
pro forma disclosures of net income and earnings per share as if the fair value
method of accounting had been applied.

Recent Accounting Pronouncements
     In April 2002, the FASB issued SFAS No. 145 "Rescission of FASB Statements
No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical
Corrections." This statement rescinds SFAS No. 4, "Reporting Gains and Losses
from Extinguishment of Debt," and an amendment of that statement, SFAS No. 44,
"Accounting for Intangible Assets of Motor Carriers," and SFAS No. 64,
"Extinguishments of Debt Made to Satisfy Sinking-Fund Requirements." This
statement amends SFAS No. 13, "Accounting for Leases," to eliminate
inconsistencies between the required accounting for sale-leaseback transactions
and the required accounting for certain lease modifications that have economic
effects that are similar to sale-leaseback transactions. Also, this statement
amends other existing authoritative pronouncements to make various technical
corrections, clarify meanings, or describe their applicability under changed
conditions. Provisions of SFAS No. 145 related to the rescission of SFAS No. 4
were effective for the Company on November 1, 2002 and provisions affecting SFAS
No. 13 were effective for transactions occurring after May 15, 2002. The
adoption of SFAS No. 145 did not have a material impact on our financial
statements.

     In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities." This statement covers
restructuring type activities beginning with plans initiated after December 31,
2002. Activities covered by this standard that are entered into after that date
will be recorded in accordance with the provisions of SFAS No. 146. The adoption
of SFAS No. 146 did not have a significant impact on our consolidated financial
position or results of operations.

     In December 2002, the FASB issued SFAS 148, "Accounting for Stock-Based
Compensation--Transition and Disclosure," which provides alternative methods of
transition for a voluntary change to fair value based method of accounting for
stock-based employee compensation as prescribed in SFAS 123, "Accounting for
Stock-Based Compensation." Additionally, SFAS 148 required more prominent and
more frequent disclosures in financial statements about the effects of
stock-based compensation. The provisions of this Statement are effective for
fiscal years ending after December 15, 2002, with early application permitted in
certain circumstances. The Company has adopted the disclosure provisions in our
consolidated financial statements as disclosed above under Stock Based
Compensation.


                                      F-16


<PAGE>


                 EARTHWORKS ENTERTAINMENT, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Continued)

     In November 2002, the FASB issued Interpretation No. 45, Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others ("FIN 45"). FIN 45 requires a company, at
the time it issues a guarantee, to recognize an initial liability for the fair
value of obligations assumed under the guarantee and elaborates on existing
disclosure requirements related to guarantees and warranties. The initial
recognition requirements of FIN 45 are effective for guarantees issued or
modified after December 31, 2002 and adoption of the disclosure requirements are
effective for the Company during the first quarter ending December 31, 2003. The
adoption of FIN 45 will not have a significant impact on our consolidated
financial position or results of operations.

     In January 2003, the FASB issued FASB Interpretation No. 46 ("FIN 46"),
"Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51."
FIN 46 requires certain variable interest entities to be consolidated by the
primary beneficiary of the entity if the equity investors in the entity do not
have the characteristics of a controlling financial interest or do not have
sufficient equity at risk for the entity to finance its activities without
additional subordinated financial support from other parties. FIN 46 is
effective for all new variable interest entities created or acquired after
January 31, 2003. For variable interest entities created or acquired prior to
February 1, 2003, the provisions of FIN 46 must be applied for the first interim
or annual period beginning after June 15, 2003. The adoption of FIN 46 did not
have a significant impact on our consolidated financial position or results of
operations.

     In May 2003, the FASB issued SFAS Statement No. 150, "Accounting for
Certain Financial Instruments with Characteristics of both Liabilities and
Equity". This Statement establishes standards for how an issuer classifies and
measures certain financial instruments with characteristics of both liabilities
and equity. It requires that an issuer classify a financial instrument that is
within its scope as a liability (or an asset in some circumstances). This
statement is effective for financial instruments entered into or modified after
May 31, 2003, and otherwise is effective at the beginning of the first interim
period beginning after June 15, 2003, except for mandatorily redeemable
financial instruments of nonpublic entities, if applicable. It is to be
implemented by reporting the cumulative effect of a change in an accounting
principle for financial instruments created before the issuance date of the
Statement and still existing at the beginning of the interim period of adoption.
The adoption of this statement is not expected to have a significant impact on
the Company's results of operations or financial position.

VALUE OF FINANCIAL INSTRUMENTS

         The carrying amounts reported in the consolidated balance sheets for
Earthworks Entertainment's cash, accounts receivable, accounts payable, and
accrued expenses approximate their fair values due to the short maturities of
these financial instruments.

DEFERRED COSTS

         Deferred costs relating to production agreements are charged to
operations over the effective period of each agreement. Deferred costs
anticipated to be charged to operations during the next year are classified as
current assets.

                                      F-17


<PAGE>


                 EARTHWORKS ENTERTAINMENT, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTSFAIR

NOTE 4-STOCKHOLDERS' EQUITY

COMMON STOCK

         The Company has authorized 50,000,000 shares of common stock with a par
value of $.08.

         As of October 1, 1997 the Company's predecessor had 9,181,365 shares of
common stock outstanding, after the exchange of 75,000 preferred shares to
common shares pursuant to the Plan of Reorganization.

         The Company recorded a reverse split in bankruptcy of one new share of
common stock for each 25 prior shares.

         Also pursuant to the plan of reorganization the Company issued 30,970
shares to creditors.

         On January 4, 1999, and effective to April 1, 1998 due to the
recapitalization, the Company issued 4,000,000 shares of its common stock in
connection with the reverse acquisition of Media Vision Productions Inc.

         Through September 30, 1998, the Company issued 255,000 shares of its
common stock for $1.00 per share in private placements, which net of offering
costs of $14,011, generated net proceeds to the Company of $240,989.

         In February 1999 the Company issued 500,000 shares in connection with a
loan and recorded loan fees of $25,000.

         Through March 1999, the Company issued 742,500 shares of its common
stock for $1.00 per share in private placements, which net of offering costs of
$62,472, generated net proceeds to the Company of $680,028.

         In May and June 1999, the Company issued 170,000 shares of its Common
Stock for $1.00 in private transactions, generating net proceeds to the Company
of $170,000.

         In October 1999 the Company agreed to issue 500,000 shares of stock in
consideration for cancellation of the loan and accrued interest, discussed in
Note 8, totaling $267,500. These shares are treated as outstanding as of
September 30, 1999 pursuant to SFAS 128.

         On September 24, 1999 the Company granted 3,400,000 shares to officers
and directors in connection with their employment agreements.

         During fiscal year ended September 30, 2000 the Company issued
3,437,181 shares for $.69 per share, together with warrants to purchase one
share each of the Company's common stock at an exercise price of $1.50 expiring
in September 2005, which net of offering costs of $284,975 generated net
proceeds to the Company of $2,086,680.

         During the year ended September 30, 2000 the Company issued 805,420
shares to officers in consideration for cancellation of $327,000 of unpaid
advances and $478,424 of unpaid salary and expenses.

         The Company issued 500,000 stock options at $.20 per share, valued at
$368,750 which were exercised during the period.

         During the year ended September 30, 2000 the Company issued 1,135,000
shares of its common stock for services to consultants valued at $1,892,752.

         As discussed in Note 5, the Company issued 400,000 shares to an officer
in connection with the acquisition of MPI.

         During the month of October, 2000 the Company issued 1,319,575 shares
of its common stock for $.69 per share, together with warrants to purchase one
share each of the Company's common stock at an exercise price of $1.50 expiring
in October 2005, which net of offering costs of $130,018 generated net proceeds
to the Company of $469,982.


                                      F-18


<PAGE>


                 EARTHWORKS ENTERTAINMENT, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTSFAIR

NOTE 4-STOCKHOLDERS' EQUITY - (Continued)

         In connection with this transaction, the Company issued 150,000 shares
of its common stock to an investment banking firm, together with 642,103
warrants with an exercise price of $.69, expiring in October 2005.

         In December, 2000, the Company issued 100,000 shares of its common
stock, valued at $112,500 based upon the fair market value of the Company's
common stock on the date of the agreement, for production rights for a product
line.

         In March, 2001, the Company issued 100,000 shares in a private
placement for $40,000.

         Through June 30, 2001, the Company agreed to a temporary reduction in
the exercise price of the $1.50 warrants to $.40 and offered to register those
shares of the September, 2000 and October, 2000 private placements as well as
the shares issued through the exercise of the amended warrants. Of the
5,6633,600 warrants available, 1,702,830 warrants were exercised at a price of
$.40, which net of offering costs of $99,718, generated net proceeds to the
Company of $576,487. Additionally, the Company issued 639,645 shares of its
common stock to the investors of the September 2000 and October 2000 shares in
lieu of registering the shares and warrants and a non-cash charge of $454,296 is
included in general and administrative expenses in fiscal 2001 for reparation
expense.

         In connection with this transaction the Company issued 112,500 shares
of its common stock to an investment banking firm together with 148,426 warrants
with an exercise price of $.40 and 96,315 warrants with an exercise price of
$1.50, expiring in August, 2006.

         In connection with settlement agreements with certain management, the
Company recorded the return of 1,675,688 shares, valued at $1,407,544 based upon
the original value ascribed to the shares when issued, effective May 31, 2001.

         In connection with the termination of the Company's investment in
MPI,the Company recorded the return of 1,350,000 shares of its common stock,
valued at $4,150,000 based upon the original value ascribed to the shares when
issued, effective July 30, 2001.

         During the year ended September 30, 2001, the Company issued 250,000 to
its current president in connection with an executive consulting agreement, and
issued 1,720,00 shares to consultants for services valued at $493,630 based upon
the fair market value on the date the shares were issued.

         In September, 2001, the Company issued 91,832 shares of its common
stock to a prior president, valued at $13,775, in connection with a settlement
of all claims.

         Effective September 30, 2001, the Company issued 1,442,563 shares of
its common stock to the current directors for unpaid salary and expenses
totaling $115,405, based upon the fair market value of the Company's common
stock on September 30, 2001.

                                      F-19


<PAGE>


                 EARTHWORKS ENTERTAINMENT, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4-STOCKHOLDERS' EQUITY - (Continued)

         Effective June 30, 2002, the company issued 1,125,000 shares of its
common stock values to consultants for services totaling $456,750, based upon
the fair market value of the company's common stock on June 30, 2002.

         During the year ended September 30, 2002 the company issued 250,000
shares to its former President and 1,800,000 to its executive officers for
compensation valued at $286,000 based upon the fair market value on the date the
shares were issued.

         In January 2003 the Company issued 750,000 shares as reparations to an
individual investor valued at $15,000.

         In February 2003 the Company issued 1,200,000 shares in a settlement
offer for outstanding licensing fees related to a licensing agreement executed
in 1999. After on-going negotiations, in September 2003, the parties agreed to
settle $100,000 of the outstanding balance. The 1,200,000 shares were valued at
$108,000 based upon the fair market value on the on the date the shares were
issued to the licensor. The Company recorded a settlement loss of $8,000 in the
quarter ended September 30, 2003.

         In May 2003, the Company issued 600,000 shares of its common stock for
$.03 per share in private placements which generated proceeds to the Company of
$20,000.

         In June 2003, in connection with the termination of the merger
agreement. the Company issued 2,400,000 shares of its common stock to certain
shareholders who pledged certain shares as collateral for a loan of $50,000.
This resulted in a reparative loss on settlement of $92,000 which was recorded
in the period ended June 30, 2003

         In July 2003, the Company issued 833,333 shares of its common stock for
$.03 per share in private placements which generated proceeds to the Company of
$25,000.

         In August 2003, the Company issued 625,000 shares of its common stock
for $.08 per share in private placements which generated proceeds to the Company
of $50,000.

         In September 2003, the Company issued 1,637,500 shares of its common
stock for $.08 per share in private placements, which net of offering costs of
$13,756, generated net proceeds to the Company of $117,744.

         In September 2003, the Company issued 125,000 shares valued at $36,250
to Robert Marty, the president of MPI, in connection with an agreement to cancel
1,400,000 warrants and to cancel a production agreement executed in June 2002.
Additionally, as part of this agreement, both parties settled the outstanding
notes due to and from Earthworks Entertainment.

         During the year ended September 30, 2003 the Company issued 3,000,000
shares to its new President in connection with an employment agreement executed
in on June 15, 2003 valued at $210,000 based upon the fair market value on the
date the shares were issued. Additionally, the Company issued 6,800,000 shares
to two of its executive officers for compensation valued at $152,000 based upon
the fair market value on the on the dates the shares were issued.

         During the year ended September 30, 2003 the Company issued 4,000,000
shares for consulting services valued at $88,900 based upon the fair market
value on the date the shares were issued.

          On December 31, 2003, the Company's Board of Directors approved an
 agreement with Peter Keefe, the Company's president, pursuant to a deal
 memorandum dated December 1, 2003, which was intended to be binding and subject
 to definitive agreements. The agreement provides for the issuance of 10,000,000
 restricted shares of the Company's common stock (or an equivalent value of both
 common stock and warrants to purchase shares of common stock-based upon the
 Company's share price as of December 1, 2003; which was $.20; the equivalent at
 the time, of approximately $2,000,000,) the Company will acquire rights to
 certain properties. On January 20, 2004, the Company executed a definitive
 agreement and acquired the rights to certain properties, including direct
 profit participation, sales and marketing rights, merchandise licensing rights,
 home video distribution and television distribution rights in connection with
 the Nine Dog and Z-Force animated show properties. In connection with this
 agreement, during the quarter ended March 31, 2004, the Company issued
 10,000,000 shares of its common stock to Mr. Keefe.


                                      F-20


<PAGE>


                 EARTHWORKS ENTERTAINMENT, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4-STOCKHOLDERS' EQUITY - (Continued)

          During the quarter ended March 31, 2004, the Company issued 850,000
shares of its common stock in private placements to various investors, netting
proceeds of $70,000 in cash to the Company.

        During the quarter ended March 31, 2004, the Company issued 600,000
shares of its common stock, valued at $102,000 for consulting services.
Additionally, the Company issued 100,000 shares in connection with the exercise
of warrants secured by a note, valued at $10,000.

       During the quarter ended June 30, 2004, the Company issued 300,000 shares
of its common stock, valued at $75,000 to convert a bridge note payable and
accrued interest. Additionally, the Company issued 60,000 shares of its common
stock in connection with the exercise of warrants secured by a note, valued at
$9,000.

      On July 31, 2004, the company issued 750,000 shares of its common stock
valued at $142,500 to settle a bridge note and accrued interest.

SETTLEMENTS

         In connection with the plan of reorganization, the Company objected to
the claim of the prior shareholder of the predecessor subsidiary, and as
discussed in Note 7, the disallowed claim would have to be overturned, which the
Company has been advised by counsel is unlikely. Had the claim been allowed,
this shareholder could be awarded up to 58,833 of "new" shares pursuant to the
plan of reorganization. Effective September 17, 2001 the Company settled with
this dispute with the issuance of 91,833 shares valued at $13,775.

         Additionally, the settlement stipulated that as the holder of 33,000
warrants which originally expired in July, 2000, said warrants were extended
until October 30, 2004.

         In May, 2001 the Company settled employment related disputes with two
of the Company's directors and the preceding president, which resulted in the
return of certain shared and an agreement for the Company to pay certain
compensation. The two directors returned 642,563 shares of stock, valued at
$642,563, based upon the value recorded when issued and agreed to $48,000 of
compensation to be paid for the twelve months ended May, 2002. Said payments to
be made at the discretion of the Company based upon working capital. A third
director returned 300,000 shares, valued at $112,500, based upon the value
recorded when issued. The Company's prior president agreed to return certain
un-hypothicated shares and have certain shares re-issued, resulting in the net
return of 733,125 shares to the Company, valued at $652,481, such value again
based upon the value ascribed when issued. The Company agreed to pay the prior
president compensation at $2,500 per week for 103 weeks. As such, included in
settlement income is $1,407,544 of the value originally ascribed to these shares
less $148,104, the discounted value of such payments.

         Effective June 30, 2002, the company issued 400,000 shares of its
common stock, valued at $99,000, based upon the value when issued, to settle
shareholder related disputes.

         During the fiscal year ended September 30, 2004, the Company recorded
losses on the extinguishment of debts of $122,370.

RESERVED SHARES

Licensing Rights and Distribution Agreements

The Company has reserved up to 10,000,000 shares of its common stock ; (or an
equivalent value of both common stock and warrants to purchase shares of common
stock-based upon the Company's share price as of December 1, 2003; $.20); in
connection with certain licensing and distribution rights, the assignment for
which, subject to the completion of certain fairness reviews and valuation
appraisals is discussed in Note 11.

CONVERTIBLE NOTES

         Convertible notes issued during the fiscal year ended September 30,
2004 may be converted into 12,500,000 shares of the Company's common stock at
$.08 per share. Additionally, warrants to purchase 3,500,000 shares at $.08 per
share were issued to the note holders.

                                      F-21


<PAGE>


                 EARTHWORKS ENTERTAINMENT, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4-STOCKHOLDERS' EQUITY - (Continued)

STOCK OPTIONS

         In connection with the employment agreements discussed in Note 7, the
Company issued stock options to the officers which vest over the three years
covered in the agreement and generally expire in five years.

         A summary of the stock option activity for the three years ended
September 2003, all of which were nonqualified stock options, is set forth
below:
                                                                     WEIGHTED
                                                                      AVERAGE
                                                        NUMBER OF    EXERCISE
                                                         OPTIONS       PRICE

Outstanding at September 30, 2000                        400,000       $.625
                                                        --------       -----
Granted                                                  250,000        .250
Exercised                                                   --           --
Canceled                                                (400,000)      .625)
                                                        --------       -----
Outstanding at September 30, 2001                        250,000       $.250
                                                        ========       =====
Outstanding at September 30, 2002                        250,000       $.250
                                                        ========       =====
Granted                                                  800,000       $.250
Exercised                                                   --            --
Canceled                                                    --            --
                                                        --------       -----
Outstanding at September 30, 2003                      1,050,000       $.250
                                                       ---------       -----
Granted                                                     --            --
Exercised                                                   --            --
Canceled                                                    --            --
                                                        --------       -----
Outstanding at September 30, 2004                      1,050,000       $.250
                                                       ---------       -----
Exercisable at September 30, 2004                        950,000       $.250
                                                        ========       =====

         The per share weighted average remaining life of the options
outstanding at September 30, 2004 is 2.8 years.

         The Company has elected to continue to account for stock-based
compensation under APB Opinion No. 25, under which no compensation expense has
been recognized for stock options granted to employees at fair market value. For
pro forma purposes, the weighted average fair value of options granted in 2001
and 2003 were estimated as of the date of grant using the Black-Scholes stock
option pricing model, based on the following weighted average assumptions:
annual expected return of 0%, annual volatility of 160% and 210%, risk-free
interest rate ranging from 6.0 in 2001 and 3% in 2003 and expected option life
of 3 years for 2001 and 2003, respectively. The per share weighted-average fair
value of stock options granted during 2000 was $.16 and 2001 was $.215. Had
compensation expense for stock options granted under the Plan been determined
based on fair value at the grant dates, the Company's net loss for 2001 and 2002
would have been increased to the pro forma amounts shown below.

                                    SEPTEMBER 30,       SEPTEMBER 30,
                                         2004               2003
                                    --------------      -------------
Net loss:
  As reported                         $1,318,249         $ 1,325,451
  Pro forma                           $1,327,719         $ 1,334,951


                                      F-22


<PAGE>


                 EARTHWORKS ENTERTAINMENT, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4-STOCKHOLDERS' EQUITY - (Continued)

WARRANTS

         In connection with the Plan of Reorganization effective January 4,
1999, approximately 367,355 shares issued entitled each holder to a warrant to
purchase stock, effective from July 4, 1999 through July 4, 2000. The exercise
price is equal to 75% of the trading price on the date exercised.

         In connection with private placements during fiscal year ended
September 30, 2000 and through October, 2000, a total of 5,663,600 warrants were
issued and were initially exercisable at $1.50 for a period of five years. For
the period ended September 30, 2001, 1,702,830 of these warrants were exercised
at an amended price of $.40 and 3,150,241 remain unexercised at $1.50.

         In connection with the private placements discussed above in September
and October, 2000 and again through June 30, 2001, the Company issued 886,444
warrants for services to an investment banker at prices of $.40, $.69 and $1.50,
respectively. This same investment banker received 20,000 warrants to purchase
the Company's common stock at $.20 for a period of 5 years through September,
2006 in connection with bridge loans.

         In connection with the issuance of 125,000 shares to MPI to cancel the
Production agreement, the 1,400,000 warrants originally issued to Robert Marty,
the president of MPI, were cancelled.

         In connection with the issuance of $800,000 in Bridge Notes during the
quarter ended June 30, 2004, the issued 2,666,667 warrants to purchase one share
of the Company's common stock at $.15 for a period of 3 years through May 2007.

         As a result of the preceding the Company has the following warrants
outstanding as of September 30, 2004.

                                      Exercise
Expiration                            Quantity              Price
                                      ---------             -----
November 2004                         3,150,241             $1.50

October 2006                            288,000             $ .15
November 2006                           100,000             $ .08
November 2006                           100,000             $ .20
November 2006                           790,531             $ .25
December 2006                           312,500             $ .20
January 2007                            937,500             $ .25
February 2007                         1,200,000             $ .30
March 2007                              645,000             $ .25
May 2007                              2,666,667             $ .15
May 2007                                480,000             $ .25
                                     ----------             -----
   Total                             10,669,908
                                     ==========

Weighted average
  exercise price                                            $ .59
                                                            =====


PREFERRED STOCK

         The certificate of incorporation of the Company authorizes its board of
directors to issue for value 1,000,000 shares of preferred stock, $10 par value.
Preferred stock may be issued in series with such designations, relative rights,
preferences and limitations as may be fixed from time to time by the board of
directors of the Company. In connection with the predecessor's acquisition of
PTS, the Company issued 75,000 shares which were converted into common stock on
a one to one basis pursuant to the plan of reorganization. As of September 30,
2004 the Company had no preferred stock outstanding.


                                      F-23


<PAGE>


                 EARTHWORKS ENTERTAINMENT, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5-TRANSACTIONS WITH RELATED PARTIES

         During the fiscal year ended September 30, 1999 two officers of the
Company advanced $38,954 of working capital to the Company with no specific
repayment terms and no interest. These advances are expected to be repaid from
the proceeds of pending private placements.

         In September 1999, a shareholder advanced the Company $15,000 with
interest at 7% per annum and principal due on demand. Interest expense of $1,350
was recorded for the fiscal year ended September 30, 2000.

         During the fiscal year ended September 30, 2000 two officers of the
Company advanced $327,000 to the Company and in turn were issued 327,000 shares
of the Company's common stock for repayment.

During the fiscal year ended September 30, 2000 four officers received 478,424
shares of the Company's common stock in lieu of unpaid salary and expenses
totaling $478,424.

         In connection with the acquisition of the MPI Subsidiary an officer
advanced the Company $150,000 in September, 2000 and personally guaranteed a
$100,000 note to the seller in exchange for 400,000 shares of the Company's
common stock. This note was repaid in fiscal year 2001 and this officer returned
300,000 shares to the Company.

         In July, 2001 a director lent The Company $20,000, with interest at 6%
per year and is due upon completion of a private placement by the Company. This
note, plus accrued interest, was paid in June 2002 by the issuance of 100,000
shares of the company's common stock.

In June 2003, the Company issued 200,000 shares of its common stock to its
former president and 1,400,000 shares of its common stock to an officer in
connection with shares pledged as collateral for a $50,000 loan issued to the
Company.

During the fiscal year ended September 30, 2003, the Company issued 3,000,000
shares of its common stock to its new president in connection with an employment
agreement valued at $210,000. Additionally, the Company issued 6,800,000 to two
of its executive officers in lieu of $152,000 of compensation.

         On December 31, 2003 the Company agreed to purchase rights from the
president, to be paid in equity, the approximate value of which is $2,400,000.
(See also note 11.)

         On August 6, 2004, the Company's issued a total of $200,000 in
Convertible Bridge Notes, due to mature in one year from the date of note, to
its two executive officers (its President and its CFO) to settle $100,000 in
unpaid salary to each executive. The notes are convertible into shares of the
Company's common stock at $.08 and bear interest at 10%.

NOTE 6-LEASES

         The company presently leases its temporary offices on a month to month
basis.

                                      F-24


<PAGE>


                 EARTHWORKS ENTERTAINMENT, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7-COMMITMENTS AND CONTINGENCIES

         The Company's predecessor's subsidiaries were involved in various
litigation in connection with their prior operations which were eliminated by
the reorganization under bankruptcy.

In connection with the predecessor's acquisition and operation of its former
operating subsidiary PTS, the Company had terminated and commenced an action
against the former president of the PTS subsidiary. In turn, the former
president had commenced an action for wrongful termination against the Company.
These actions were dismissed in the bankruptcy proceedings and the former
president has appealed this decision. On September 13, 2001 this matter was
settled with this issuance of 91,833 shares of the Company's common stock.

         On September 24, 1999 the Company entered into employment agreements
with its president and two executive officers. The general terms of the
agreements provide for the three officers to receive annual salaries and certain
stock and option compensation. In May, 2001 these agreements were canceled and
certain shares were returned to the Company.

     On October 5, 1999, the Company entered into a licensing agreement with an
individual and Spartan Sporting Goods and Fashions, Inc. ("Spartan") a privately
held New York Corporation for the exclusive master license of certain logos,
trademarks and copyrights. The agreement provided that the Company pay 30% of
all royalty income received under this agreement to the Licensor, or "Spartan".
Additionally, the agreement provided for minimum annual non-refundable license
fees for each optional renewal, potentially through 2008. Effective December 31,
2002, the Company decided not to renew the agreement with Spartan. As of
September 30, 2003, net of the settlement of $100,000 for 1,200,000 shares,
$102,400 remained due to Spartan for unpaid license rights fees. During the
period ended June 30, 2004, the Company settled the remaining balance with
Spartan.


      On June 15, 2003, the Company entered into an employment agreement with
its president and chief executive officer. The general terms of the agreement
provides for a grant of 3,000,000 shares of common stock upon execution of the
agreement; a base salary of $185,000 per year with annual increases of 10%
through 2006 and a grant of 400,000 options at $.25 per share and vest for
100,000 options per year through 2006.

      On July 1, 2003, the Company entered into an employment agreement with its
executive vice president and chief operating/financial officer. The general
terms of the agreement provides for a base salary of $165,000 per year with
annual increases of 10% through 2006 and a grant of 400,000 options at $.25 per
share and vest for 100,000 options per year through 2006.

NOTE 8-INCOME TAXES

         No provision has been made for corporate income taxes on the parent
company due to cumulative losses incurred. The Company has available unrealized
tax benefits in the form of net operating loss ("NOL") carry-forwards of
approximately $13,430,000 for federal income tax purposes to reduce future
taxable income. If not utilized, the federal NOL's expire at various dates
through 2023.

         Certain changes in stock ownership can result in a limitation in the
amount of net operating loss and tax credit carryovers that can be utilized each
year, including the merger and plan of acquisition dated January 4, 1999. The
Company has recognized these tax benefits as a deferred tax asset subject to a
100% valuation allowance since it is uncertain whether or not these tax benefits
will be realized.

NOTE 9-PROPERTY AND EQUIPMENT

Property and equipment, at cost, at September 30, 2004 is as follows:

Office equipment                                               $  1,150
Less-Accumulated depreciation                                       (96)
                                                               --------
                                                               $  1,054
                                                               ========
         Depreciation expense for the period for the year ended September 30,
2004 and 2003 was $10,695 and $11,225 respectively.

                                      F-25


<PAGE>


                 EARTHWORKS ENTERTAINMENT, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 10-NOTES PAYABLE

         The Company borrowed $250,000 with notes bearing interest at 1% per
month, or 12% per annum, in February, 1999. In connection with these notes, the
Company issued 500,000 shares of its common stock to the makers, valued at
$25,000, prior to when the Company's shares began trading.

         Subsequent to September 30, 1999 the Company and the makers agreed to
convert these notes, together with accrued interest of $17,500, totaling
$267,500, to 500,000 shares of common stock. The shares have been reflected as
outstanding as of September 30, 1999 pursuant to SFAS 128.

         In connection with the acquisition of the majority interest of the MPI
subsidiary, an officer guaranteed a $100,000 note to the seller and lent an
additional $150,000 to the Company in September 2000, both of which were repaid
during the year ended September 30, 2001, together with $8,650 of interest
thereon.

         In September, 2001, the Company issued $45,000 of bridge notes to
investor, due to mature the earlier of one year from the date of note or the
closing of an equitably funding if at least $2,000,000. The notes bear an
interest rate of 10% and the note holders received 22,500 warrants to purchase
one share each of the Company's common stock at $.20. In the event of a default
the investors would receive an additional 22,500 warrants with an exercisable
price of $.10.

         In September 2002, the company issued $146,500 of bridge notes to
investors, due to mature the earlier of one year from the date of note or the
closing of an equitable funding of at least $2,000,000. These notes bear
interest of 10% and the note holders received 116,000 warrants to purchase one
share of the company's common stock at $.20.

        During the year ended September 30, 2003 the Company accrued $11,906 of
interest on these notes and $40,000 of principle and $4,334 of accred interest
was converted into 458,333 shares of the Company's common stock.

       During the quarter ended June 30, 2004, the Company issued $800,000 of
bridge notes to investors, due to mature in one year from the date of note. The
notes are convertible into shares of the Company's common stock at $.08 per
share. The Company plans to re-pay theses notes from revenues anticipated to
commence in fiscal 2005 from projects currently under development. These notes
bear interest at 10% and the note holders received 2,666,667 warrants to
purchase one share of the Company's common stock at $.15 per share.


               During the quarter ended September 30, 2004, the Company
converted a total of $200,000 of accrued salary ($100,000 each to its President
and its CFO) into bridge notes, due to mature in one year from the date of note.
The notes are convertible into shares of the Company's common stock at $.08 per
share. The Company plans to re-pay theses notes from revenues anticipated to
commence during the fourth quarter from projects currently under development.

During the year ended September 30, 2004 the Company accrued $35,668 of interest
on these notes.


NOTE 11-SUBSEQUENT EVENTS

      In November 2004, the Company formed a wholly owned subsidiary, Z-Force
Enterprises, LLC. which is designed to hold those assets pertaining to the
Z-Force properties.

      In November 2004, the Company issued 590,000 shares of its common stock,
valued at $112,100 to settle outstanding bridge notes and accrued interest.

      In November 2004, the Company issued 250,000 shares of its Common Stock
its new Director, Catherine Malatesta in connection with her appointment to the
Company's Board of Directors.

                                      F-26


<PAGE>


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

         None.

                                    PART III

ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT.

         Our present executive officers and directors are:

NAME                      AGE          POSITION HELD

Peter Keefe               52           President/CEO

William H. Campbell       59           Executive Vice President/CFO

Catherine Malatesta       45           Director (Effective October 19, 2004)

Gary A. Goodell           53           Director (Through October 19, 2004)


Current Directors

       Peter Keefe, President, Chief Executive Officer and Director, is a highly
regarded world-renowned creator, producer & marketer of superlative television
series and highly successful merchandise licensing properties. In the past
eighteen years he has created, produced and sold over 600 half hours of award
wining children's and family entertainment programming; TV shows watched by
hundreds of millions of viewers, generating hundreds of millions of dollars in
commercial business. Some of his `hit' performance properties in the global
entertainment market include Voltron, Denver the Last Dinosaur, Widget, Mr.
Bogus and Twinkle.

         William H. Campbell, Executive President, Chief Financial Officer and
Director, was not only one of the original founders of Earthworks Entertainment,
but also of National Media, which became the largest purchaser of cable
television time in the United States. He has 15 years experience in investor and
corporate relations. Through the years Mr. Campbell established contacts with
the financial press, radio, television and print which included television
interviews with CNN, FNN and many local stations. He has also been interviewed
and quoted in many major business and financial publications.

         Catherine Malatessta, Director, has been the key executive responsible
for implementing the global TV marketing strategies for many hit properties
including the truly massive entertainment hit phenomenon, the original Teenage
Mutant Ninja Turtles. Her highly successful 20 year career as a senior
production, sales and marketing studio executive includes top positions with
Warner International Television and Westinghouse Broadcasting.


         Gary Goodell, Director, served as our Vice President-Marketing from
January 4, 1999 through September, 2000. Mr. Goodell has 25 years experience in
radio, TV and recording industry. Prior to joining the Company, since 1994 he
was contracted with a major market television station to produce and syndicate
programming to over 300 stations. He has owned and operated radio stations. In
the record industry he has marketed and promoted top acts for CBS, Warner
Brothers, EMI, RCA and Capital.



Former Directors
----------------

         On April 17, 2001, John Haggin resigned from the Earthworks
Entertainment Board.

         On April 17, 2001 John Sgarlat resigned as Chairman/CEO and as Director
of the Board; Cornelia Eldridge was appointed President/COO.

         On May 15, 2002 Cornelia Eldridge resigned as President/CEO.

         On February 7, 2003 Daniel Cannon was appointed President/CEO.

         On June 13, 2003 Daniel Cannon was terminated as President/CEO.

         On June 15, 2003 Peter Keefe was appointed President/CEO.

         On June 26, 2003 Daniel Cannon resigned as a Director.


                                      -14-
<PAGE>


ITEM 10. EXECUTIVE COMPENSATION.

                                                            SECURITIES
                                                           AND PROPERTY
                                            SALARIES,        INSURANCE
                                              FEES,         BENEFITS OR
                                            DIRECTOR'S       REPAYMENT
NAME OF INDIVIDUAL                            FEES,             OF
 OR NUMBER OF             CAPACITIES IN    COMMISSION        PERSONAL
PERSONS IN GROUP          WHICH SERVED     AND BONUSES       BENEFITS
--------------------      ------------     -----------      -----------

Peter Keefe (1)            President
                           CEO,
                           Director,
                           President        $ 190,395             0
William H. Campbell (1)    Executive Vice
                           President,
                           Director        $  169,125             0


(1) Denotes Director.

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

MANAGEMENT

         The following table sets forth the number of Common Shares of the
Company owned by record, or to the knowledge of the Company, beneficially, by
each Officer or Director of the Company and by each person owning five percent
or more of the Company's outstanding shares, as of November 15, 2004, based upon
65,730,863 shares outstanding.

                       AMOUNT AND NATURE OF    PERCENTAGE OF
NAME AND ADDRESS       BENEFICIAL OWNERSHIP     CLASS OWNED

Peter Keefe (1)(2)          13,200,000             20.0%
William Campbell (1)         4,550,000              7.0%
Gary Goodell                 2,497,542              3.7%
Catherine Malatesta            250,000              0.0%

         All officers and directors as a group beneficially own 20,497,542 or
31.1% of the outstanding shares of the Company.

(1)      Includes 200,000 options vested as of November 15, 2004.
(2)      Includes 10,000,000 shares in connection to rights agreement approved
         on executed on April 26, 2004


                                      -15-
<PAGE>


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

         During the fiscal year ended September 30, 1999 two officers of the
Company advanced $38,954 of working capital to the Company with no specific
repayment terms and no interest.

         In September 1999, a shareholder advanced the Company $15,000 with
interest at 7% per annum and principal due on demand. No interest expense was
recorded for the fiscal year ended September 30, 1999. Interest expense was
$1,350 for fiscal 2000 and 2001 respectively.

         In connection with the predecessor's acquisition and operation of its
former operating subsidiary PTS, the Company had terminated and commenced an
action against the former president of the PTS subsidiary. In turn, the former
president had commenced an action for wrongful termination against the Company.
These actions were settled effective September 17, 2001 for 1,833 shares of the
Company's common stock and the extension of time to exercise 33,000 warrants to
purchase one share each of the Company's common stock at 25% of the market value
on the date of exercise through October 30, 2004.

         Gary Goodell was issued no additional consideration for his assignment
of the rights to an agreement with Independence Public Media to the Company.

         During the fiscal year ended September 30, 2000 two officers of the
Company advanced $327,000 to the Company and in turn were issued 327,000 shares
of the Company's common stock for repayment.

         During the fiscal year ended September 30, 2000 four officers received
478,424 shares of the Company's common stock in lieu of unpaid salary and
expenses totaling $478,424.

         In connection with the acquisition of the MPI subsidiary an officer
advanced the Company $150,000 in September, 2000 and personally guaranteed a
$100,000 note to the seller in exchange for 400,000 shares of the Company's
common stock. During the fiscal year ended September 30, 2001, this note was
repaid and the officer returned 300,000 shares of the Company's common stock.

         In September, 2000 the Company terminated its Executive Vice President,
Gary A. Goodell. In December, 2000 the former Executive Vice President filed a
complaint in the Circuit Court of the Fifteenth Judicial Circuit in Palm Beach
County seeking restatement of his employment contract. In March 2001, Bill
Campbell joined Gary Goodell's suit.

         In May 2000, the prior president instituted a suit in federal court
against the Company's current president and an investment banker, in connection
with his employment contract. This suit was settled, resulting in the return of
certain shares and the payment of $2,500 per week for 103 weeks commencing on
May 29, 2001.

         In July, 2001, Gary Goodell lent the Company $20,000 at 6%, due upon
completion of a private placement by the Company.

         Effective September 30, 2001, Mr. Gary Goodell, William Campbell and
Cornelia Eldridge were issued 317,384, 325,179 and 800,000 shares, respectively,
valued at $.08 per share based upon the market price of the Company stock in
exchange for $25,390, $26,014 and $64,000 of unpaid salary and expenses.

         Effective September 30, 2001 Mr. Gary Goodell, William Campbell and
Cornelia Eldridge were issued 200,000 shares each for services performed during
fiscal year ended September 30, 2001.


                                      -16-
<PAGE>


         Effective June 30, 2002, the company issued 1,125,000 shares of its
common stock values to consultants for services totaling $456,750, based upon
the fair market value of the company's common stock on June 30, 2002.

         During the year ended September 30, 2002 the company issued 250,000
shares to its former President and 1,800,000 to its executive officers for
compensation valued at $286,000 base upon the fair market value on the date the
shares were issued.

         In December 2002, the company issued 800,000 shares of its common stock
to two of its officers for compensation valued at $32,000, based upon the value
of its common stock at the date of issuance.

         Effective June 30, 2002, the company issued 400,000 shares of its
common stock, valued at $99,000, based upon the value when issued, to settle
shareholder related disputes.

         Effective September 25, 2003 the Company issued 1,200,000 shares valued
at $108,000, based upon the value when issued, as settlement for outstanding
licensing fees related to a licensing agreement executed in 1999.

         Effective June 30, 2003, in connection with the termination of the
merger agreement. the Company issued 2,400,000 shares of its common stock to
certain shareholders who pledged certain shares as collateral for a loan of
$50,000. This resulted in a reparative loss on settlement of $92,000 which was
recorded in the period ended June 30, 2003.

In September 2003, the Company issued 125,000 shares valued at $36,250 to Robert
Marty, the president of MPI, in connection with an agreement to cancel 1,400,000
warrants and to cancel a production agreement executed in June 2002.
Additionally, as part of this agreement, both parties agreed to settle the
outstanding notes due to and from Earthworks Entertainment.

         During the year ended September 30, 2003 the Company issued 3,000,000
shares to its new President in connection with an employment agreement executed
in on June 15, 2003 valued at $210,000 based upon the fair market value on the
date the shares were issued. Additionally, the Company issued 6,800,000 shares
to two of its executive officers for compensation valued at $152,000 based upon
the fair market value on the on the dates the shares were issued.

         During the year ended September 30, 2003 the Company issued 4,000,000
shares for consulting services valued at $88,900 based upon the fair market
value on the date the shares were issued.

During the year ended September 30, 2003, in connection with employment
agreements executed with its executive officers, the Company has accrued unpaid
compensation of $36,960 to its President/CEO and $36,250 to its Executive Vice
President/CFO.

         On December 31, 2003, the Company's Board of Directors approved an
agreement with Peter Keefe, the Company's president, pursuant to a deal
memorandum dated December 1, 2003, which was intended to be binding and subject
to definitive agreements whereby in exchange for the issuance of 10,000,000
restricted shares of the Company's common stock (or an equivalent value of both
common stock and warrants to purchase shares of common stock based upon the
Company's share price as of December 1, 2003; which was $.20, or the equivalent
at the time, of approximately $2,000,000) to acTquire the rights to certain
entertainment properties. On January 20, 2004, the Company executed a definitive
agreement and aquired the rights to certian properties.

         On December 31, 2003, the Company issued 250,000 shares of it's common
stock, valued at $60,000, on a former execution and 250,000 shares of it's
common stock, valued at $60,000, in lieu of unpaid salary and expenses totaling
$193,135.


                                      -17-
<PAGE>


         On December 3, 2003, the Company issued 400,000 shares of it's common
stock, valued at $80,000, in lieu of unpaid salary and expenses totaling
$74,940.

         On May 12, 2004 the Company issued $800,000 of Convertible Bridge Notes
to accredited investors which are convertible into 10,000,000 shares of the
Company's common stock at $.08. These notes bear interest at 10% calculate
quarterly and are due in one year. The note holders were also issued warrants to
purchase 2,666,667 shares of the Company's common stock at $.08 per share.

         On August 6, 2004, the company issued a total of $200,000 in
Convertible Bridge notes, due to mature in one year from the date of the note,
to it's two executive officers (it's President and CFO) to settle $100,000 of
unpaid salary to each executive. The notes are convertible into shares of the
Company's common stock at $ .08 and bear interest at 10%, on substantially the
same terms as the convertible bridge notes issued to investors. These notes are
convertible into 2,500,000 shares of the Company's common stock.

         PART IV

ITEM 13. EXHIBITS.

         (a)(1) The following is a list of exhibits filed as part of this Annual
Report on Form 10-KSB. Where so indicated by footnote, exhibits which were
previously filed are incorporated by reference.

EXHIBIT NUMBER
REFERENCE         DESCRIPTION

   (2a)*          2nd Amended Plan of Reorganization

   (2b)*          Agreement and Plan of Merger between Media Vision Production,
                  Inc and Media Vision Properties, Inc.

   (3a)*          Articles of Incorporation, as amended

   (3b)*          By-laws, as amended

   (4)*           Specimen of Common Stock certificate

   (10)*          Agreement with:

   (10.1)         (a)* John P. Sgarlat

                  (b)* William Campbell

                  (c)* Gary Goodell

   10.2*          (a) Assignment of Rocky Mountain Music Marketing Contract

   10.3*          (b) Contract with Independence Public Media***

   10.4*          (c) Licensing Agreement Spartan Sporting Goods.

   10.5*          Stock Purchase Agreement between MPI Media Productions
                  International, Inc. and Earthworks Entertainment, Inc.

   10.6*          Stock Warrant

   10.7*          Programming deal memo

   10.8*          General release with indemnity from Company to Marty

   10.9*          General release with indemnity from Marty to Company

   10.98          Employment agreements with Peter Keefe, and William Campbell.

                  (a) Convertible Bridge Note Agreement with P. Keefe
                  (b) Convertible Bridge Note Agreement with W. Campbell

   99.1           Officers Certifications

* The above items were previously filed and are hereby incorporated by
reference.


ITEM 14 - CONTROL PROCEDURES

         The Company's chief executive officer and chief financial officer have
evaluated the controls and procedures within 90 days of the filing date of this
quarterly report and concluded that the Company's disclosure controls and
procedures were effective. There were no significant changes in the Company's
internal controls subsequent to the date of the evaluation by such officer.


                                      -18-
<PAGE>


                                   SIGNATURES

         In accordance with the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant, caused this report to be signed
on its behalf by the undersigned based upon the best information available
pursuant to Section 12b-25, thereunto duly authorized.

                                           Earthworks Entertainment, Inc.

Dated: December 30, 2004                   By: /s/ Peter Keefe
       -----------------                   ---------------------
                                           Peter Keefe, CEO/President


         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed by the following persons on behalf of the Registrant
and in the capacities and on the dates indicated.

NAME TITLE                                                          DATE


/s/ Peter Keefe
------------------------
Peter Keefe                  CEO, President                   December 30, 2004


/s/ WILLIAM H. CAMPBELL
------------------------
William H. Campbell          CFO, Executive Vice President    December 30, 2004


/s/ CATHERINE MALATESSTA,
 -----------------------
Catherine Malatessta         Director                         December 30, 2004


/s/ GARY GOODELL
 -----------------------
Gary Goodell                 Director                         December 30, 2004











                                      -19-