U. S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB
                                   (Mark One)

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

                    FOR THE FISCAL YEAR ENDED MARCH 31, 2002


                          Commission File No. 33-40444


                           Bodyguard Records.com, Inc.
                           --------------------------
             ( Exact name of registrant as specified in its charter)


Delaware                                                    13-4087440
(State or other jurisdiction of                          (I.R.S. Employer
incorporation or organization)                           Identification Number)

                       56 Colfax Avenue, Clifton, NJ 07015
               (Address of Principal Executive Offices) (Zip Code)

                                 (973) 574-1315
                 (Issuer's Telephone Number Including Area Code)

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

                           Securities registered under

                           Section 12(g) of the Act:

                                      None

                                (Title of Class)

Check  whether  the Issuer  (1) has filed all  reports  required  to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter period that the registration was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. YES | X | NO

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

State issuer's revenues for its most recent fiscal year. $0

The aggregate market value of the voting stock held by  non-affiliates  computed
by  reference  to the price at which the stock was sold,  or the average bid and
asked prices of such stock, as of July 1, 2002 was approximately $70,000.

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date.

Common Stock, $.001 Par Value, 900,000 shares


                       DOCUMENTS INCORPORATED BY REFERENCE
                                      None

                                     PART I

ITEM 1. BUSINESS

(a) Business Development

    1.      Historical Development

The  Registrant  was  incorporated  under the laws of the State of  Delaware  on
November 12, 1999. The Registrant's  principal  executive offices are located at
56 Colfax Avenue,  Clifton, NJ 07015. The Registrant's  telephone number at that
address  is  (973)   574-1315;   and  its   corporate   website  is  located  at
www.bodyguardrecords.com.

From  inception on November 12, 1999,  through July 2001,  the  Registrant was a
development  stage  entertainment  company  without an  operating  history.  The
Registrant  received its first income from  operations in July 2001, but has yet
to earn a profit. The Registrant's  objective is to utilize its artist recording
agreement  with Quiet Riot,  its license  rights to the Bay City Rollers and its
national distribution agreement with Navarre Corporation to sell CD's in stores,
to establish its name,  and to promote and market its group of five new artists.
The Registrant also intends to use the Internet and other emerging  technologies
such as Mp3 to accomplish its goals.

The Registrant is presently  engaged in conducting  its initial public  offering
pursuant  to  Form  SB-2  Registration  Statement  No.  33-40444,  which  became
effective on February 11, 2002.  The Registrant is offering a minimum of 100,000
and a maximum of 400,000  shares of its common  stock to the public at $2.50 per
share.

     (b)  Business of the Registrant

Risk Factors - The  Registrant's  business is subject to numerous  risk factors,
including the following:

It is Difficult to Evaluate the Registrant's  Business and Prospects  Because it
Does Not Have Any Operating History

The Registrant was formed in November 1999, signed its first recording artist in
December 1999, launched its website on January 17, 2000 and did not generate any
revenue from  operations  until April 2001. The  Registrant's  short  existence,
coupled with the limited number of recording artists it has signed, the relative
obscurity  of all but two of them  and its  lack of  working  capital,  makes it
difficult  to evaluate the  Registrant's  current  business and  prospects or to
accurately predict its future revenue or results of operations. The Registrant's
revenue and income potential continue to be unproven,  and its business model is
evolving.  Because both the Internet and musical taste are constantly  changing,
especially  among young people,  the  Registrant may need to modify its business
model to adapt to these changes.

The  Registrant is  undercapitalized  and may be unable to continue its business
unless it completes its initial public offering.

If the Registrant is to survive,  it will need to close on the sale of a minimum
of  100,000  shares  of its  common  stock at $2.50 per  share  pursuant  to its
February  11, 2002 initial  public  offering on Form SB-2 and  thereafter  start
generating  revenue.  The Registrant has until August 11, 2002 in order to close
on the minimum number of offered  shares.  Even if the Registrant  closes on the
minimum number of offered shares,  it must commence to generate revenue from the
retail and online sales of music CD's and related  merchandise  and online sales
of digitally distributed music in order to continue in business.

The Registrant's  Business Model Is New and Unproven,  and it May Not Be Able to
Generate Sufficient Revenue to Operate its Business Successfully

In the event the Registrant can only sell the minimum number of offered  shares,
it may only be able to  sustain  operations  for a period  of four  months.  The
continued  conduct of operations  beyond four months will require the Registrant
to raise additional capital.  Since any such additional  financing will probably
be private and involve  restricted shares as opposed to the free trading shares,
there can be little  assurance that the Registrant will be successful is raising
any additional capital.  In addition,  if the Registrant raises additional funds
through the  issuance of equity  securities,  its  stockholders  may  experience
dilution of their ownership interest,  and the newly-issued  securities may have
rights  superior to those of the shares in its initial public  offering.  If the
Registrant  raises  additional  funds by  issuing  debt,  it may be  subject  to
limitations  on  its  operations,   including  limitations  on  the  payment  of
dividends.

The Registrant May Never Earn a Profit

As a  company  that has only  recently  commenced  operations  with an  unproven
business model,  the Registrant may continue to be  unprofitable,  even with the
proceeds  from its  initial  public  offering.  For the  period  from  inception
(November 12, 1999) to March 31, 2002,  the Registrant had net losses of $_____.
The  Registrant  did not have any  revenue  from  operations  until  the  second
calendar  quarter of 2001. As of March 31, 2002, the Registrant had total assets
of $____ and a shareholders' deficiency of $(408,426).  The Registrant continues
to experience losses and it depends upon the implementation of its business plan
and the proceeds  from at least the sale of the minimum  number of shares in its
initial public offering to continue its business.

The  Registrant  expects its losses and  negative  cash flow to continue for the
foreseeable  future.  The Registrant  anticipates  that its losses will increase
significantly  from current  levels because plan to  significantly  increase its
expenditures for sales and marketing, the development and signing of new artists
as well as the  enhancement of its web site.  With increased  expenses,  we will
need to generate significant revenue to achieve profitability.  Consequently, it
is possible that the Registrant may never achieve profitability,  and even if it
does  achieve  profitability,   the  Registrant  may  not  sustain  or  increase
profitability  on a quarterly  or annual basis in the future.  The  inability to
become  profitable may result in its being required to file for protection under
the federal bankruptcy laws.

Five of its Seven  Artists  Are  Unknown  to the  Record  Buying  Public and the
Registrant May Have Difficulty in Selling Their Records and Cd's

Quiet  Riot  and the Bay  City  Rollers  are its  only  artists  with  any  name
recognition or significant  fan base. The Registrant  will be heavily  dependent
upon the success of their new CD's to generate  interest  and  awareness  of its
label and its seven other  artists.  Although the  registrant  believes that the
CD's of these two artists will sell over time,  there can be no  assurance  that
its  reliance  on  Quiet  Riot  and the Bay City  Rollers  will not  prove to be
misplaced.

If  the Registrant Don't Sell its Music, it Will Fail

The  Registrant's  financial  performance  is  entirely  dependent  upon  market
acceptance  of its  CD's and  related  music  merchandise,  which  will  require
substantial  marketing efforts and the expenditure of significant  funds.  There
can be no assurance  that its  marketing  program,  when finally  developed  and
employed, will ever be successful.

In order to  initiate  sales,  the  Registrant  will  offer  music  and  related
merchandise  that  appeals to a large  number of retail  and  online  consumers,
particularly  young people,  ages 15-25.  The Registrant will also try to create
online communities that are conducive to electronic commerce, build or license a
sufficiently  robust and scalable  electronic  commerce  platform and develop an
order  fulfillment  capability.  Since its target market includes Internet users
under the age of 18, who have  limited  access to credit  cards,  its ability to
capture retail and online product revenue from this group may be limited. If the
Registrant is not  successful in meeting  these  challenges,  its growth will be
limited and its business will be severely and adversely affected.

The Lack of  Advertising  Revenue on its  Website  Could  Slow the  Registrant's
Growth

There  has  been a  recent  and  dramatic  decline  in  the  demand  for  online
advertising which traditionally has been an important source of revenue. Despite
this fact,  and once the Registrant  start selling music online,  the Registrant
intend to initiate the sale of advertising space on its web site.  However,  and
due to recent events,  the  Registrant  may not be able to attract  advertisers.
This would  deprive the  Registrant  of a source of revenue with a higher profit
margin than the sale of its music and other merchandise.

The  Loss  of the  Registrant's  Single  Source  for  the  Pressing  and  Retail
Distribution of its Cd's Could Hurt its Business

Pursuant to its January 18, 2001, three year agreement with Navarre Corporation,
100% of the manufacturing, distribution and fulfillment of the Registrant's CD's
destined  for  retail  sale in North  America  will be  exclusively  handled  by
Navarre.  Since the Registrant expect that approximately 95% of its first year's
CD sales will be at retail, as opposed to digitally  downloaded,  the Registrant
is  effectively  dependent  upon a single  source of supply  for at least  three
years.  The Registrant's  business would be  significantly  disrupted if Navarre
were to  terminate  or  breach  its  agreement  with the  Registrant's  or if it
suffered  adverse  developments  that  affect its  ability to perform  under its
agreement.

If the  Registrant  Does Not Keep its  Existing  Artists  and Add New Ones,  the
Registrant Will Fail

The  Registrant  believe  that its  future  success  depends  on its  ability to
maintain its existing artist agreements and to secure additional agreements with
artists.  The  Registrant's  business would be adversely  affected by any of the
following:

o    the failure of its two established acts to meet anticipated sales criteria;

o    the inability of at least one of its new artists to achieve popularity;

o    increased  competition to maintain its existing  artists  relationships;

o    inability  to recruit new artists;

o    non-renewals of its current artist  agreements;  and o poor  performance or
     negative publicity about its artists.

If the  Registrant  are not able to provide  valuable  services or incentives to
artists, or if the Registrant otherwise fail to maintain good relations with its
artists,  they may lose interest in renewing  their artist  agreements  with the
Registrant or look to get out from their agreements with the Registrant.  All of
the Registrant's current artist contracts have a term of one record album with a
minimum of ten songs and except  for Quiet Riot and the Bay City  Rollers,  have
granted  the  Registrant  options for  between  two and four  additional  record
albums. If the Registrant fail to meet these obligations, the Registrant may not
be able to sign its  artists to another  agreement;  and the  Registrant  may be
unable to recoup its costs to  develop,  operate  and  promote  its web site and
artist roster.

In the past, the Registrant has not offered its artists  options to purchase its
common stock;  and no options have been granted or issued as of the date of this
report.  However,  and if the  Registrant  become a publicly  owned company as a
result of its initial public offering,  of which there can be no assurance,  the
Registrant may find it necessary to make such offers in the future. In the event
the  Registrant  become  publicly  owned  but  the  market  price  of its  stock
languishes at low levels or under  performs,  the  Registrant may not be able to
offer artists options or other equity  incentives on attractive enough terms. If
the  Registrant  cannot  provide  adequate  incentives,  its efforts to sign new
artists  may  be  impaired.  If  the  Registrant  cannot  maintain  its  current
relationships  with artists or sign agreements  with new artists,  its user base
would  likely  diminish  and its ability to generate  revenues  from  electronic
commerce and advertising would be seriously harmed.

Risks Related to the Registrant's Industry

The Registrant May Need to Change the Manner in Which the Registrant Conduct its
Business If Government Regulation Increases

There  are  currently  few  laws  or  regulations  that  specifically   regulate
communications or commerce on the Internet.  Laws and regulations may be adopted
in the future,  however,  that  address  issues such as user  privacy,  pricing,
taxation,  content,  copyrights,  security,  distribution,  and the  quality  of
products and services. Several telecommunications  companies have petitioned the
Federal  Communications  Commission to regulate  Internet service  providers and
online  services  providers  in a  manner  similar  to long  distance  telephone
carriers and to impose access fees on these companies.  Any imposition of access
fees  could  increase  the  cost of  transmitting  data  over the  Internet.  In
addition,  the growth and development of the market for online commerce may lead
to more  stringent  consumer  protection  laws,  both in the  United  States and
abroad, that may impose additional burdens on us. The United States Congress has
enacted Internet laws regarding children's privacy, copyrights, taxation and the
transmission of sexually explicit  material.  The law of the Internet,  however,
remains largely  unsettled,  even in areas where there has been some legislative
action.  Moreover,  it may take years to determine the extent to which  existing
laws relating to issues such as property  ownership,  libel and personal privacy
are  applicable  to the Web.  Any new, or  modifications  to  existing,  laws or
regulations relating to the Web could adversely affect its business.

Prohibition  and  restriction  of Internet  content and commerce could reduce or
slow Internet use,  decrease the acceptance of the Internet as a  communications
and  commercial  medium and expose the  Registrant  to  liability.  Any of these
outcomes  could  have a  material  adverse  effect on its  business,  results of
operations and financial condition. The growth and development of the market for
Internet commerce may prompt calls for more stringent consumer  protection laws,
both in the United  States and  abroad,  that may impose  additional  burdens on
companies conducting business over the Internet.

Special Information Regarding Forward Looking Statements

Some of the  statements in this  prospectus  are  "forward-looking  statements".
These  forward-looking  statements  involve  certain  known and  unknown  risks,
uncertainties and other factors which may cause its actual results,  performance
or achievements to be materially different from any future results,  performance
or achievements expressed or implied by these forward-looking statements.  These
factors include, among others, the factors set forth above under "Risk Factors."
The words  "believe,"  "expect,"  "anticipate,"  "intend" and "plan" and similar
expressions identify forward-looking  statements. The Registrant caution you not
to place undue  reliance on these  forward-looking  statements.  The  Registrant
undertake no obligation to update or revise any forward-looking statements or to
publicly  announce  the result of any  revisions  to any of the  forward-looking
statements in this document to reflect future events or developments.

Business of the Registrant - Overview

The Registrant's objective is to become an innovative record company. Initially,
however, the Registrant intends to act more like a traditional record company in
that the  Registrant  will seek to utilize its artist  recording  agreement with
Quiet  Riot,  its  license  rights  to the Bay  City  Rollers  and its  national
distribution agreement with Navarre Corporation as a springboard to sell CD's in
retail stores.  Once the Registrant  start to generate cash flow, the Registrant
intends to try to establish its name, and to use the Internet and other emerging
technologies  such as Mp3 to  successfully  promote and market its group of five
new artists.  Later, the Registrant  intend to allow visitors to its web site to
have access to a variety of styles of music,  a database of a number of artists,
with links to the artist's homepage and biographical information. The Registrant
intends to offer visitors to its web site the  opportunity to order CD's via its
mail order  department,  or via digital download directly to their computer from
Navarre Corporation, Magic, Inc. and Mac Milli Entertainment, third party online
distribution companies, at a reasonable cost.

In addition,  the Registrant  intends to  occasionally  utilize  technology that
provides a live video link to recording  sessions at its studio in Clifton,  New
Jersey  so fans can "sit in" on an  actual  recording  session.  The  Registrant
intends to post a schedule of these sessions on its web site. When  operational,
the Registrant's video link will incorporate several different camera angles, so
that its viewers can decide who or what he/she  would like to observe,  i.e. the
singer, guitarist, drummer or even the producer at the control board.

The Registrant intends to utilize traditional and non-traditional  marketing and
distribution channels, such as online services, interactive media and syndicated
radio and cable  television,  in order to cost effectively  promote its web site
and exploit the music  entertainment  rights which the Registrant may develop or
acquire.  The  Registrant's  business  plan was  developed by its two  principal
executive  officers and founders  John Rollo and Eugene  Foley.  From  inception
through April 10, 2001, the Registrant did not have any revenue from operations.
There  can  be no  assurance  that  any or all of  its  business  plan  will  be
successfully  implemented  or that the  Registrant  will  continue  to  generate
sufficient revenues from operations to meet the requirements of its business.

Industry and Opportunity

In dollar  terms,  and  according  to  Billboard  Magazine,  an  industry  trade
publication, music sales increased 6.3% in 1999, to $14.6 billion, up from $13.7
billion  in 1998.  However,  and as  indicated  in the March 4, 2000  edition of
Billboard:

"In dollar terms,  though,  music sales  increased 6.3% in 1999 to $14.6 billion
from 12.2 billion last year. But this is not an entirely accurate account of the
market because the  computations  are based on suggested  list prices,  and most
product  is sold at  lower  prices.  In 1998  music  sales  rose  12.1% to $12.2
billion.  With  sales up 6.3% and units up only  3.2%,  the  indication  is that
higher  prices  contributed  at least  three  percentage  points  to the  dollar
increase  last  year.  Most  music  manufacturers  did in fact  raise  list  and
wholesale prices last year".

According to the Recording Industry  Association of America, a trade group whose
members  manufacture most of the music recordings produced in the United States,
sales of CD singles have  increased  from $6 million in annual sales in 1990, to
$213  million  in 1998 and from 1 million  CD single  units  ships to 56 million
units over the same period. Recording Industry Association of America's research
indicates an 11.6% increase in units shipped to direct and special markets which
include mail order operations,  record clubs and non-traditional retailers and a
7.4%  increase in dollar  value from these music  sales  between  1997 and 1998.
Recording  Industry  Association of America  estimates that sales by mail order,
record  club and other  non-traditional  outlets  account for 24.4% of the total
domestic market.

One of the latest  technological  innovations in the music industry has centered
on digital  distribution,  the  downloading  of compressed  music files over the
Internet  to a PC.  Online  music  sales  attributable  to digital  distribution
remains small at this time, but the Registrant  believe it will be an increasing
portion of the total pre-recorded  online music sales market in the near future.
Forrester  Research,  Inc.  predicts that revenues from digital music  downloads
will reach $1.1 billion in 2003,  equaling  approximately seven percent of total
music sales.  However,  Jupiter  Communications  estimates  that  revenues  from
digital music downloads will reach only $30 million by 2002.

The CD continues to be the driver of growth.  Unit sales of CD albums rose 10.8%
last year, to 939 million units.

The vast majority of the music listening audience is comprised  primarily of two
age groups: 15-24 and 25-49. For most individuals in these groups, popular music
has been,  and remains,  a major force in their lives.  Although  teenagers  and
young adults purchase the majority of prerecorded  music, the Recording Industry
Association  of America  estimates  that their  numbers have  declined in recent
years and that the over-35  market has been  increasing.  This increase has been
attributed  to the  continuing  trend by record  labels to release  product with
broad-based  appeal that is able to attract  occasional  buyers.  the Registrant
intend to  capitalize  on this trend in music by  developing  artists  that will
appeal to the occasional buyers in selected markets.

There are currently five major labels which are generally recognized to dominate
the recording  industry along with their subsidiary labels:  Time/Warner;  Sony;
BMG;  Thorn-EMI;   and  Universal.   Although  independent  labels  individually
represent a small percentage of the market for prerecorded  music, in 1999 sales
of albums,  both new and catalog,  by independent  labels as a group constituted
the  largest  percentage  market  share in the  prerecorded  music  market.  the
Registrant  believe  that new artists and new trends in music are more likely to
come  from an  independent  label as they can more  easily  react  and  adapt to
shifting consumer tastes.

Artist Development and Agreements

The  Registrant's  primary focus will be the  development of new artist releases
and related  artist  development,  encompassing  modern  rock,  alternative  and
power-pop.  Its  strategy is to develop and acquire a core group of  independent
labels  to which  the  Registrant  will  provide  support  services  in order to
maximize the opportunities for discovering and minimize the risk associated with
developing future successful recording artists. The Registrant currently has one
label,  Bodyguard Records and have developed a roster of seven artists,  two who
are established and five who are new. The Registrant's  established  artists are
Quiet Riot, a 1970's Hard Rock group,  with whom the Registrant  entered into an
Artist Recording  Agreement on January 8, 2001; and the Bay City Rollers,  a Pop
group,  which the Registrant  received the license rights to market and sell one
CD and the option for a second,  on February 21, 2001. The Registrant's five new
artists are Summer Snowmen and Dennis  DeCambre with whom the Registrant  signed
written artist  recording  agreements on December 15, 1999,  January 6, 2000 and
February  1,  2000,  respectively;  and Eight  Days Gone and Love Saves The Day,
featuring Dean Davidson with whom the Registrant signed written artist recording
agreements  on September  26, 2000,  and  December  12, 2000,  respectively.  On
February 21, 2001, the Registrant acquired license rights to market and sell one
CD and options for two to four  additional  CD's for Matt Cheplic,  Daphne Hero,
and Jake Thomas.

On February 21, 2001, the Registrant entered into two written license agreements
with Atlantic International Capital Holdings, an affiliated Bermuda corporation.
The first agreement,  which is for a term of 20 years,  grants to the Registrant
the  exclusive  worldwide  right and license to  manufacture,  market,  promote,
distribute and sell the first compact discs,  cassette tapes,  records,  and any
other audio or  sound-carrying  reproductions  recorded by Matt Cheplic,  Daphne
Hero and Jake Thomas. In consideration for these license rights,  the Registrant
agreed to pay to Atlantic  International Capital Holdings a royalty of ten (10%)
percent of its gross income for each CD the Registrant  sell in any medium.  The
second agreement,  which is for a term of 12 years, grants to the Registrant the
exclusive  worldwide  right  and  license  to  manufacture,   market,   promote,
distribute and sell the Live at the Budokan, 1977 compact discs, cassette tapes,
records, and any other audio or sound-carrying reproductions recorded by The Bay
City Rollers.  In consideration for these license rights,  the Registrant agreed
to pay to Atlantic International Capital Holdings a royalty of ten (10%) percent
of its gross income for each CD the Registrant  sells in any medium for the life
of the agreements.

In February  2002,  the  Registrant  released Love Saves The Day from its Artist
Recording Agreement with the Registrant, and the group subsequently broke up. On
March 14, 2002, and in consideration of $5,000 and an additional  $5,000 payable
out of any major record company  advance,  the  Registrant  assigned its artists
recording agreement with Eight Days Gone to a non-affiliated record company. The
Registrant  also  agreed  with  Jake  Thomas to defer  the  finalization  of the
recording of his CD until after the Registrant completes the sale of the minimum
number of shares in its initial public offering.

On June 18,  2002,  the  Registrant  entered  into a  licensing  agreement  with
Acrobat,  Music & Media Limited,  a  non-affiliated  London based  entertainment
company, for the distribution in Europe (including Scandinavia),  Australia, New
Zealand,  South  Africa,  and the Far East  (except  for  Japan) of the Bay City
Rollers Live At The Budakon,  1977 CD. In consideration  for the license rights,
the Registrant will receive 15% of all gross income  generated by Acrobat in the
designated territories. As of the date of this Report, the Registrant:


o    Completed the recording,  mastering,  and  manufacturing of 3,000 copies of
     "Superstar," the first CD from Love Saves the Day (featuring Dean Davidson)
     in its New York City studios;

o    Has  completed  the  recording  of "A.M.  World",  the first CD for  Summer
     Snowmen;

o    Have  completed  the  recording of "Drinking At The Bar",  the first CD for
     Dennis DeCambre;

o    Have completed the recording of "Guilty Pleasures",  its first CD for Quiet
     Riot,  in the Canoga  Park,  California  studios of Rumbo  Records.  Guilty
     Pleasures, which contains 11 new songs, is the first Quiet Riot album since
     1999. "Guilty Pleasures" commenced  manufacturing on April 6, 2001, and was
     released to retail stores on May 29, 2001, pursuant to its January 3, 2001,
     National  Distribution and Warehouse Agreement with Navarre Corporation;  o
     Manufactured  1,000  copies  of "Self  Composure",  the  first CD for Naked
     Underneath  on  September  1, 2000 and later  released  this group from its
     agreement with the Registrant;

o    Manufactured  1,000 copies of "A.M.  World" the first CD for Summer Snowmen
     on March 16, 2001;

o    Manufactured  1,000 copies of "Daphne Hero" the first CD for Daphne Hero on
     March 16, 2001;

o    Manufactured  1,000  copies of "Don't Let Me Lose My Mind" the first CD for
     Matt Cheplic on March 16, 2001;

o    Entered into a written  agreement with Dennis DeCambre for the extension of
     the September 1, 2000  production  date of "Drinking At The Bar", his first
     CD until April 25, 2001.  the  Registrant  has ordered,  and received 1,000
     copies of this CD on April 25, 2001;

o    Assisted  Eight  Days  Gone  with  their  initial  recording  session  in a
     Pennsylvania  studio in January  2001 of "The Absence of  Subtlety",  their
     first CD;

o    Scheduled a tentative  initial  recording  session in its New Jersey studio
     for Jake Thomas.  the Registrant  intends to begin working with Jake Thomas
     in March, 2002;

o    Conducted a professional  lip-sync video session shoot of Naked Underneath,
     Summer  Snowmen,  and Dennis  DeCambre;  and  prepared a music  video clip,
     segments of which are  expected to be displayed on its website in November,
     2001;

o    Manufactured 3,000 copies of `Live at the Budokan,  1977,' its first CD for
     The Bay City Rollers on April 9, 2001.  The album began selling via its web
     site on April 16,  2001,  and was  released to retail  store  locations  by
     Navarre Corporation on September 11, 2001;

o    The Registrant  monitored Quiet Riot's performance in Grand Slam Metal Jam,
     a  scheduled  40 show  United  States  arena  concert  tour  along with the
     heavy-metal  bands Poison,  Warrant and Enuff Znuff,  that commenced on May
     26, 2001.  Due to an injury to a member of Poison,  the tour  terminated in
     late July 2001;

o    On February 21, 2002, the Registrant  entered into a one year non-exclusive
     Internet License  Agreement with  Magicinc.com,  Cybars.com and Magic Music
     (collectively  Magic Music)  relating to the  distribution  of the music of
     Daphne Hero and Matt Cheplic.  Pursuant to the agreement,  magic Music will
     pay the Registrant  50% of the revenue  generated from the Internet sale of
     the  licensed  music.  As of the date of this  Report,  no revenue has been
     generated from this agreement.

In  September,  2001,  the  Registrant  conducted a direct  marketing  campaign,
mailing 5,000 color postcards  promoting Matt Cheplic and 5,000 promoting Daphne
Hero.  Postcards  were  sent  to  consumers  in  each  of  the  artist's  target
demographics.  the  Registrant  placed  full-color  print ads in  College  Music
Journal's "New Music Weekly,"  promoting Quiet Riot in August,  and Matt Cheplic
and Daphne  Hero in  September  2001.  The  Registrant  secured  interviews  and
articles in regional  publications for Quiet Riot, Matt Cheplic,  and Love Saves
the Day. These articles  appeared in June, July,  August,  and September,  2001.
Love Saves The Day was interviewed by Philadelphia's Channel 6, an ABC affiliate
station,  on  September  15, 2001.  It aired on that  station's  6:00 News.  the
Registrant  hired  the  firm  Rubenstein  Public  Relations  (New  York,  NY) to
publicize the Registrant and its artists via print media, radio, and TV, as well
as at music industry  events.

In November,  2001, the Registrant ordered 1,000 CD's for Eight days Gone, which
it received in January 2002.  Thereafter in March 2002, the registrant  assigned
all of its rights to this artist to Parc Records, Inc., a non-affiliated entity.

Each of the registrant's  artist agreements is for a term of one record album of
a minimum of ten songs. Except for its agreement with Quiet Riot, which does not
contain any options and its license  rights to the Bay City  Rollers  which only
contains an option for one additional CD, all of its  agreements,  including the
agreements  underlying its license rights,  grant to the Registrant  options for
between two and four  additional  record albums.  The Registrant was required to
produce  one record  album for both Naked  Underneath  and  Dennis  DeCambre  by
September  1,  2000,  subject,  however,  to its sale of the  minimum  number of
shares.  As  indicated  above,  the  Registrant  met  its  obligation  to  Naked
Underneath and received a written extension of its obligation to Dennis DeCambre
until April 15, 2001. CDS were then  manufactured,  and the Registrant  received
them on April 25, 2001. Other than Quiet Riot and the Bay City Rollers,  none of
the Registrant's artist agreement subject it to a specific production date. None
of its artist  agreements  require the  Registrant to pay any advances to any of
its artists. Except for the Registrant's agreements with Quiet Riot, and the Bay
City Rollers,  all of the  Registrant's  agreements  grant to the Registrant the
exclusive right and license to sell artist merchandise such as tee shirts, hats,
posters, posters, tour books, keychains,  etc., subject to a 50% of net receipts
payment to the artists. Both Quiet Riot and the Bay City Rollers have the option
of, and are presently conducting their own sales of artists merchandise.  Except
for the Registrant's  agreements with Quiet Riot, and the Bay City Rollers,  all
of the  Registrant's  existing  artists  agreements,  including  the  agreements
underlying  its license  rights,  require the  Registrant  to pay a  semi-annual
royalty of:

o    $1.50 on the first 100,000 records sold;
o    $2.00 on the next 100,000 records sold;
o    $2.25 on the next 100,000 records sold;
o    $2.50 for each record sold after that; and
o    $3.00 for any copies sold directly to consumers at live  performances.  All
     royalty payments are to be made net after deduction for:
o    returned or defective copies;
o    its  recording  studio  time  calculated  at $50.00 per hits,  except  with
     respect to Summer Snowmen;  o manufacturing  and design costs; o 50% of the
     costs  of  any  video  or  television  promotional  commercial;  and  o any
     promotional appearance costs and expenses.

The  Registrant's  artist  agreement  with Quiet Riot is for a term of 18 months
subject to a single six month extension on mutual  consent.  The Registrant does
not have any options for  additional  albums,  nor does the  Registrant  has any
artist  merchandise rights except upon the request of the artist and the payment
of 50% of any net receipts. The agreement requires the Registrant to provide the
artist with a  mastering  budget of $1,000,  a graphic art and design  budget of
$1,500 and a  photography  budget of $1,000.  The  agreement  also  requires the
Registrant's to pay royalties to Quiet Riot after the Registrant  recoup certain
expenses  incurred  by it in  the  recording  and  manufacturing  of  their  CD.
Accordingly,  and after the Registrant's  recoupment of expenses,  the following
royalties  will  ultimately  become due to Quiet  Riot if and when a  sufficient
number of copies of  "Guilty  Pleasures"  are sold by Navarre  Corporation,  the
Registrant's North American  distributor:

o    40% of its gross income for each CD sold at retail outlets;
o    50% of its gross income for each CD sold via mail order;
o    50% of its gross income for each CD sold via Internet digital download;
o    50% of its gross income for each DVD or other audio/visual unit sold;
o    50% of its gross  income for each CD sold via foreign  license  agreements;
     and
o    40% of any  cash  advance  the  Registrant  receive  in a  foreign  license
     agreement.

The Registrant's  license rights to the Bay City Rollers' Live at the Budokan CD
is for a term of 12 years. The Registrant had an option for a single  additional
album  comprised  of new  music  which  expired  in May  2001.  In the event the
Registrant  produce  the new CD,  its  $125,000  advance  is  recoupable  out of
royalties, otherwise it is non-refundable. The Registrant do not have any artist
merchandise  rights. The Registrant's Live at the Budokan license requires it to
pay the following  royalties to the Bay City Rollers:

o    35% of its  gross  income  for  each CD sold at  retail  outlets  in  North
     America;
o    35% of its gross income for each CD sold via mail order in North America;
o    35% of its gross income for each CD sold via Internet  digital  download in
     North America;
o    35% of its gross  income  for each DVD or other  audio/visual  unit sold in
     North America;
o    15% of its gross  income  for each CD sold in any  manner  outside of North
     America;
o    0% of  any  cash  advance  the  Registrant  receive  in a  foreign  license
     agreement until the Registrant recoup $125,000; and 50% of any foreign cash
     advances after that.

All royalty  payments in all of its contracts and license  rights are to be made
net after deduction for:

o    returned or defective copies;
o    recording studio costs generated at its studios;
o    manufacturing and design costs;
o    50% of the costs of any video or television promotional commercial;
o    any promotional appearance costs and expenses; and
o    California  airfare,  production  related travel expenses and Rumbo Records
     recording costs incurred by John Rollo for Quiet Riot's new CD.

Initially the Registrant  intends to recruit additional new and emerging artists
from the alternative  rock/pop genres. The Registrant may also purchase outright
or  license a  finished  single or album by an artist in these or other  genres.
Once another new or emerging artist is selected,  the Registrant intend to enter
into an agreement  with the artist  similar to its artists  agreements to either
produce  "demonstration"  recordings  to permit the  Registrant to determine the
commercial  viability  of a new artist or record one or two  singles or an album
for  commercial  release  with  options  to  record  additional  albums,  at its
discretion,  at an agreed upon  recording  budget per  recording  or album.  The
Registrant intends that the recording  agreement will fix royalties and possibly
advances  to the  artist  for  each  album  produced  under  the  agreement.  In
accordance  with  industry  custom,  any  advances  for albums after the initial
release  would be  likely  to be  based  on a  percentage  of the  artist's  net
royalties  from  prior  albums,  less the  recording  budget.  Should one of the
Registrant's new performing  artists achieve  significant  sales for his, her or
its  most  recently-released  album,  it is  likely  that the  Registrant  would
renegotiate  that artist's  agreement,  granting a higher royalty rate in return
for  the  artist's  agreement  to an  extension  of the  recording  contact  for
additional albums.

It is  possible  that in addition  to Quiet Riot and the Bay City  Rollers,  the
Registrant will be able to sign an established  artist to a recording  contract,
although  the  Registrant  is not  currently  seeking to enter into a  recording
contract  with or acquire  rights to any  established  artists.  The  Registrant
classifies  any artist that was at one time signed by a major record company and
which has a solid fan base as an established artist.  There can be no assurance,
however,  that any such  contract  could be  consummated.  In the event  that an
established  artist enters into a recording  contract with the  Registrant,  its
operating   expenses   would  most  likely  be  higher   than  those   currently
contemplated.  This could result in an exhaustion of its financing  earlier than
anticipated,  unless  offset or exceeded by increased  sales of the  established
artist's products.

If  the  Registrant  redevelop  Quiet  Riot  or  the  Bay  City  Rollers  into a
commercially  successful  recording  artist,  or develop any other  commercially
successful  recording artist, there can be no assurance that the Registrant will
be able to maintain its  relationships  with such artists even if the Registrant
has entered into exclusive recording contracts with them. Furthermore, recording
artists  occasionally request releases from their exclusive recording agreement.
Among the  reasons  that may cause an  artist  to  engage  in  so-called  "label
jumping" are expectations of greater income,  advances or promotional support by
a competing label. There can be no assurance that Quiet Riot or any given artist
developed by the  Registrant  will not  determine to request a release from its,
his or her agreement  with the  Registrant.  Because of the highly  personal and
creative nature of the artist's contractual obligations to the Registrant, it is
not  feasible to force an  unwilling  artist to perform the terms of its, his or
her  contract  with the  Registrant.  If the  Registrant  does  release a "label
jumping"  artist from its, his or her contract,  the  Registrant  may be able to
obtain  an  "override  royalty"  as  consideration  for  the  release.  Override
royalties are customarily  paid by the released  artist's new recording  company
and are based on a percentage of the suggested retail selling price or wholesale
price,  depending  on the  particular  label in  question,  subject  to  certain
deductions.  Such  royalties are payable with respect to a negotiated  number of
the artist's albums after release from its, his or her existing contract.

The Registrant  will seek to contract with its new artists on an exclusive basis
for the marketing of their recordings in return for a percentage  royalty on the
retail  selling price of the recording.  The  Registrant  will generally seek to
obtain rights on a worldwide basis. Whenever possible, the Registrant intends to
utilize its artists  agreements as a typical  agreement format providing for the
number of albums to be delivered but without  advances  against  royalties being
paid upon delivery of each album or upon signing of the contract.  Provisions in
contracts  with  established  artists  vary  considerably  and may, for example,
require the  Registrant  to release a fixed number of albums  and/or  contain an
option  exercisable  by  the  Registrant  covering  more  than  one  album.  The
Registrant  will  seek to obtain  rights to  exploit  product  delivered  by the
artists for the life of the product's copyright.  Under the contracts,  advances
are normally  recoupable against royalties payable to the artist. The Registrant
will seek to recoup a portion of certain  marketing and tour support  costs,  if
any, against artist royalties.

The  Registrant's  Internet  Web  Site  Initially,  the  principal  focus of the
Registrant's web site is to:

o    inform consumers about its artists, their schedule and special events;

o    provide  interviews,  photos  and chats  with its  artists;  o offer  music
     samples and video footage of its artists;

o    to  offer   consumers  the  option  of  ordering  CD's  and  other  related
     merchandise; and

o    provide  consumers  with details of how to enter  contests  the  Registrant
     periodically intend to conduct.

On  November  12,  2000,  the  Registrant  entered  into a  written  preliminary
distribution  agreement  with Mac Milli  Entertainment,  Inc., a  non-affiliated
third  party  online  distribution  company  to  provide  non-exclusive  digital
downloaded  distribution  of its CD's to its customers who are not interested in
receiving a hard copy via UPS or similar package delivery  service.  In light of
the April 9,  2001,  termination  of its  agreement  with  Cyberretail,  Navarre
Corporation,  Magic,  Inc. and Mac Milli  Entertainment,  Inc.  will be its sole
sources for digital downloading of its CD's.

Manufacturing and Distribution

The  Registrant  currently  neither has nor intends to develop or acquire record
manufacturing or distribution  capabilities of its own.  Rather,  the Registrant
intends to enter into distribution or licensing arrangements with third parties.
Towards this end, and on January 18, 2001, the Registrant entered into a written
National  Distribution  and Warehousing  Agreement with Navarre  Corporation,  a
non-affiliated Minnesota corporation.  Pursuant to the agreement, the Registrant
appointed  Navarre as the  exclusive  retail  distributor  of all of its musical
recordings the Registrant elect to submit to Navarre and non-exclusive digitally
downloaded  distributor  for a term of three years and automatic and  successive
annual  extensions,  subject to a 90 day cancellation prior to the expiration of
the  initial  or  renewal  term.  In  consideration,  Navarre  agreed to pay the
Registrant  a  designated  base  price for each CD sold  during  the term of the
agreement.

After an initial 90 day waiting  period,  Navarre's  payments of any base prices
due to the Registrant will be paid weekly together with a weekly summary report,
and after  deduction  of 25%  return  reserve.  The  agreement  also  grants the
Registrant the right to participate in discount  programs  offered by Navarre to
rack  jobbers,  military  bases  and  others.  In  early  September,  2001,  the
Registrant  received  its first  payment of  $47,208  from  Navarre  Corporation
representing  gross sales less related artists' expenses from Quiet Riot's first
album with the Registrant.

On January 18, 2001,  the Registrant  also entered into a written  Manufacturing
Agreement and separate  Financing  Agreement with Navarre that  supplements  its
National  Distribution  and  Warehousing  Agreement.  These  agreements  are  in
connection  with a manufacturing  service that Navarre  developed for the labels
that it  distributes  on a national  basis.  Pursuant to these  agreements,  the
Registrant  furnishes a duplication master, film for CD imprinting,  all artwork
design and all printed  materials  to Navarre.  Navarre then  sub-contracts  the
manufacture  of its CD's and affords the  Registrant 75 days to pay for its CD's
from the date of shipment, either from orders received or if insufficient orders
are received,  in cash. The Registrant  believes that the  manufacturing  costs,
which are specified in the  agreement,  are equal or better than the  Registrant
could have  negotiated for on its own. On the same date, the Registrant  entered
into a separate Manufacturing  Agreement with Navarre that covers the production
of what the  industry  refers to as "One  Sheets",  the two  sided,  four  color
promotional  material  that  generally  accompanies a CD when sold to resellers.
Pursuant to this agreement, Navarre agrees to produce its One Sheets on the same
terms as its CD's.

On January 17,  2000,  the  Registrant  entered  into an  Internet  Distribution
Agreement with Cyberretail.com,  LLC, a non-affiliated company, as its exclusive
agent for the  fulfillment of any and all orders for its recorded music products
ordered  via the  Internet  or on an 800  number  for a term of two  years.  The
Registrant's agreement,  which excluded digitally downloaded music, required the
Registrant to pay a commission of a designated percentage of the retail price of
any of the  Registrant's  products sold by  Cyberretail.  On April 9, 2001,  the
Registrant   terminated   this  agreement  and  intends  to  rely  upon  Navarre
Corporation, Magic, Inc. and Mac Milli Entertainment,  Inc. as the three sources
for digital downloading of its CD's.

Historically,  the strategy of the major labels has been to control distribution
channels.  Nevertheless,  the market shares of  independent  distributors,  rack
jobbers or independent  contractors  that manage music  department of department
stores such as K-Mart and Wal-Mart, mail order companies,  touch-tone 800 number
sales,  Internet sales, and television sales have all increased.  The Registrant
believes that this growth,  fueled by the  development of the Internet and other
ongoing  changes  in  the  marketplace,  will  continue.  Another  trend  is the
consolidation of retail outlets into large retail chains,  however,  specialized
distributors can be utilized to sell prerecorded  music products to large retail
chains.  Because  of its  small  size,  the  Registrant  may not be able to take
advantage   of   traditional   distribution   channels,   such  as   specialized
distributors.  However,  the Registrant  expects to be able to take advantage of
interactive,  in-home  marketing  through  the  Internet,  telephone,  satellite
relays, or other evolving  technologies that the Registrant believes will have a
significant  effect on  distribution  in the  future.  However,  there is little
agreement as to precisely what this effect will be. The Registrant believes that
control and  ownership of the creative  products will be a key factor in the new
market where distribution can be accomplished more quickly and inexpensively.

Typical  distribution  for an  independent  label  such as the  Registrant's  is
through  either  a  major  label-owned  branch  system  or  through  independent
distributors.  The  major  label-owned  distribution  companies  offer  national
distribution,  consistent market visibility,  accounts receivable and collection
administration. Independent distributors offer similar services, but normally on
a much smaller scale.

Copyrights and Intellectual Property

The  Registrant's  prerecorded  music  business,  like  that of other  companies
involved in prerecorded  music,  will primarily rest on ownership or control and
exploitation  of musical  works and sound  recordings.  The  Registrant's  music
entertainment  products are expected to be protected under  applicable  domestic
and international copyright laws.

Although  circumstances vary from case to case, rights and royalties relating to
a particular  recording typically operate as follows:  When a recording is made,
copyright in that recording  vests either in the recording  artists and/or their
production  companies and is licensed to the recording  company or in the record
company itself, depending on the terms of the agreement between them. Similarly,
when a musical composition is written, copyright in the composition vests either
in the writer and is licensed to a third-party music publishing company, or in a
third-party  music  publishing  company  or in a  publishing  company  owned and
controlled by the artist. A public  performance of a record will result in money
being paid to the writer and publisher.  The rights to reproduce  songs on sound
carriers  i.e.,   phonograph  records,  are  obtained  by  record  companies  or
publishers  from the writer or the publishing  company  entitled to license such
compositions.  The manufacture and sale of a sound carrier results in mechanical
royalties  being  payable  by  the  record  company  to  the  publisher  of  the
composition,  who then  remits a  portion  of such  royalties  to the  writer or
writers of the composition at previously agreed or statutory rate for the use of
the  composition  and by the record  company to the  recording  artists  for the
manufacture and distribution of the recording. The Registrant intends to operate
in an industry in which  revenues  are  adversely  affected by the  unauthorized
reproduction  of  recordings  for  commercial  sale,  commonly  referred  to  as
"piracy," and by home taping for personal use.

Potential  publishing  revenues may be derived from the  Registrant's  ownership
interest in musical  compositions,  written in whole or in part by its recording
artists  or by  writers  who  are  signed  exclusively  to the  Registrant.  The
Registrant  intends to secure a partial  ownership  position in the copyright to
compositions  written  by its  recording  artists or signed  writers  where such
rights are available and have not been previously sold or assigned.  Performance
rights  in any  compositions  owned by the  Registrant  will be  enforced  under
agreements  the  Registrant   intends  to  enter  into  with  performing  rights
organizations  such  as  the  American  Society  of  Composers,   Authors,   and
Publishers,  Broadcast  Music,  Inc. and SESAC,  Inc., which licenses the public
performance  of a  composition  to  commercial  users of music such as radio and
television broadcasters,  restaurants,  retailers,  etc., and disburse collected
fees based upon the frequency  and type of public  performances  they  identify.
Generally,  revenues from  publishing are generated in the form of:

o    mechanical  royalties,  paid by the record company to the publisher for the
     mechanical duplication of a particular copyrighted composition, as distinct
     from the copying of the artist's performance of that composition;
o    performance  royalties,  collected and paid by performing  rights  entities
     such as ASCAP and BMI for the actual public  performance of the composition
     as represented by radio airplay,  Musak, or as a theme or jingle  broadcast
     in synchronization with a visual image via television;
o    sub-publishing  revenues  derived from  copyright  earnings  outside of the
     United States and Canada from its collection  agents located outside of the
     United States and Canada; and
o    licensing  fees derived from printed sheet music,  uses in  synchronization
     with images as in video or film scores,  computer  games and other software
     applications, and any other use involving the composition.

Typically,   music  publishing  agreements  with  songwriters  are  "exclusive,"
permitting  the  Registrant's  ownership of the  copyrights in all  compositions
created by the songwriter, in whole or in part, during the term of the agreement
usually in exchange for the payment of an advance to the  songwriter  and, after
the  recoupment  of such  advance,  the payment of  royalties  on sales of sound
carriers embodying any such compositions. In some cases, the Registrant may seek
to acquire a catalog of compositions previously created by a songwriter or group
of songwriters as a music publishing  asset.  The can be no assurance,  however,
that the  Registrant  will be successful in entering  into  agreements  with any
songwriters or acquiring any catalogs or that any  agreements  entered into will
result in any revenue to the Registrant.

The  Registrant  intends to engage in licensing  activities  involving  both the
acquisition  of rights to certain  master  recordings  and the licensing and the
granting of rights to third parties in the master  recordings  and  compositions
the Registrant may acquire.

On December 29, 2000, the Registrant  filed an application  for the service mark
Bodyguard Records.com,  Inc. with the United States Patent and Trademark Office.
The Registrant  received a Notice of Publication on August 1, 2001, and received
notification  of the  issuance  of this  service  mark  on  November  13,  2001.
Competition

The Registrant  compete with providers of prerecorded music and related products
both through traditional retail channels and over the Internet.  Its current and
anticipated competitors include, but are not limited to:

o    Atlantic Recording Group;
o    Universal Music Group;
o    RCA Records;
o    Arista Records;
o    Rounder Records; and
o    Matador Records.

In  addition,  there are many  companies  that  provide  Web  sites  and  online
destinations  targeted  to the  digital  downloading  of music as well as to the
record industry in general.  All of these companies  compete with the Registrant
for visitor traffic,  advertising dollars and electronic commerce partners.  The
market for Internet content  companies in the record industry is new and rapidly
evolving. Competition for visitors, advertisers and electronic commerce partners
is intense and is expected to increase significantly in the future because there
are no substantial barriers to entry in its market.  Increased competition could
result in:

o    lower advertising rates;
o    price reductions and lower profit margins;
o    loss of visitors;
o    reduced page views; or
o    loss of market share.

Any  one of  these  could  materially  and  adversely  affect  the  Registrant's
business,  financial  condition  and results of  operations.  In  addition,  the
Registrant's  ability to compete  successfully  depends on many  factors.  These
factors include:

o    the quality of the content provided by the Registrant and its competitors;
o    how easy its respective services are to use;
o    sales and marketing efforts; and
o    the  performance of its  technology.

Many of its competitors and potential new competitors have:

o    longer operating histories;
o    greater name recognition in some markets;
o    larger customer bases; and
o    significantly greater financial,  technical and marketing resources.

These competitors may also be able to:
o    undertake more extensive marketing campaigns for their brands and services;
o    adopt more aggressive advertising pricing policies;
o    use superior  technology  platforms to deliver their products and services;
     and
o    make more attractive offers to potential employees,  distribution partners,
     commerce companies, advertisers and third-party content providers.

The  Registrant's  competitors  may  develop  content  that is  better  than the
Registrant's  or that achieves  greater market  acceptance.  It is also possible
that new competitors may emerge and acquire significant market share. This could
have a material  and  adverse  effect on the  Registrant's  business,  financial
condition and results of operations.

The Registrant  also competes with the major labels and  independent  labels for
advertisers and advertising revenue. If advertisers perceive the Internet or its
network  to be a  limited  or an  ineffective  advertising  medium,  they may be
reluctant  to  devote  a  portion  of  their  advertising   budget  to  Internet
advertising or to advertising on the Registrant's website.

Environmental Matters

the  Registrant  is not aware of any  environmental  liability  relating  to its
facilities  or  operations  that  would have a  material  adverse  affect on the
Registrant, its business, assets or results of operations.

ITEM 2. DESCRIPTION OF PROPERTY

Rental Premises.  Until August 31, 2001, the Registrant maintained its principal
executive  offices  and studio at 138 Fulton  Street,  New York,  New York 10038
where   approximately   2,000  square  feet  of  space  was  subleased   from  a
non-affiliated  landlord  under a four year  written  sublease  that  expired on
August 31, 2001 at monthly rentals  starting at $1,800 and increasing to $2,024.
The  Registrant's  rent was $2,000 per month.  The  sublease was assigned to the
Registrant by Rollo Entertainment,  Corp., a Delaware corporation  controlled by
and under  common  control  of John  Rollo  the  Registrant's  president,  chief
operating  officer  and  a  director.  The  Registrant's  sublease,   which  was
personally  guaranteed by its president,  John Rollo, required the Registrant to
pay all  utility  costs  and  does not  provide  for an  option  to  renew.  The
Registrant's Fulton Street lease expired on August 31, 2001.

On July 11, 2001, the Registrant entered into a written one year lease agreement
with a non-affiliated landlord for the use of approximately 1,500 square feet of
space at 56 Colfax Avenue,  Clifton,  New Jersey 07015. The  Registrant's  lease
commences  on  August  1,  2001,  terminates  on July 31,  2002 and  grants  the
Registrant  the  right to renew  each year at  increased  rental  payments.  The
Registrant  agreed to pay annual  rentals  of  $11,400  ($950 per month) for the
first  year,  $12,000  for the first  years'  extension,  $14,400 for the second
year's  extension,  $15,000  for the third and an  increase of $600 per year for
each year  thereafter.  The Registrant's new space is adequate for its needs and
the Registrant are using it to approximately  75% of its capacity.  In late July
2001, the Registrant moved all of the recording equipment from its New York City
recording studio to Clifton,  New Jersey.

Inventory.  The inventory held by Navarre is valued  utilizing the gross selling
price. This price as of March 31, 2002, was $220,160.86. For financial statement
purposes, and in accordance with Generally Accepted Accounting  Principles,  the
Registrant's  records  the  lower  of  cost or  market  as its  inventory  value
including reserves,  damages and obsolence.  At March 31, 2002, the Registrant's
inventory for financial statement purposes is valued at $10,056.

ITEM 3. LEGAL PROCEEDINGS

Since its  inception,  no  material  legal  proceedings  have ever been  pending
against the Registrant. As of the date of this Report, no legal proceedings have
been threatened against or settled by the Registrant.

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

Neither  during the fourth  quarter of the fiscal year ended March 31, 2002, nor
at any time since its inception, did the Registrant conduct an Annual Meeting of
its  stockholders  pursuant to definitive  proxy materials under Regulation 14 A
under the 34 Act, or otherwise.

                                     PART II

ITEM 5. MARKET FOR COMMON STOCK EQUITY AND RELATED STOCKHOLDER MATTERS.

(a)  Market  Information.  There  has  never  been  no  trading  market  for the
     Registrant's  Common Stock. There can be no assurance that a trading market
     will ever develop or, if such a market does develop, that it will continue.

Exchange Act Rule 15g-9  establishes  sales  practice  requirements  relating to
"penny stocks." For any transaction  involving a penny stock, unless exempt, the
rules  require  that a broker or  dealer:  (i)  approve a person's  account  for
transactions  in penny  stocks;  and (ii)  receive  from the  investor a written
agreement  to the  transaction,  setting  forth the identity and quantity of the
penny  stock to be  purchased.  In order  to  approve  a  person's  account  for
transactions  in penny stocks,  the broker or dealer must: (i) obtain  financial
information  and investment  experience  and objectives of the person;  and (ii)
make a  reasonable  determination  that the  transactions  in penny  stocks  are
suitable for that person and that person has sufficient knowledge and experience
in financial  matters to be capable of evaluating the risks of  transactions  in
penny stocks.  The broker or dealer must also deliver,  prior to any transaction
in a penny stock,  a  disclosure  schedule  relating to the penny stock  market,
which, in highlight form, (i) sets forth the basis on which the broker or dealer
made the suitability determination;  and (ii) that the broker or dealer received
a  signed,  written  agreement  from  the  investor  prior  to the  transaction.
Disclosure  also has to be made about the risks of  investing in penny stocks in
both public offerings and in secondary trading, and about commissions payable to
both the broker-dealer and the registered representative, current quotations for
the securities and the rights and remedies  available to an investor in cases of
fraud in penny stock transactions.  Finally,  monthly statements have to be sent
disclosing  recent price information for the penny stock held in the account and
information on the limited market in penny stocks.

(b) Holders.

As of  March  31,2002,  the  number  of  holders  of  record  of  shares  of the
Registrant's Common Stock,$.001 par value per share, the Registrant's only class
of equity securities, was believed by management to be as follows:

  Title of Class                             Number of Record Holders
  --------------                             ------------------------
  Common Stock, $.001 par                                9

(c) Dividends.

The  Registrant  has paid no  dividends  during the fiscal years ended March 31,
2001 and March 31, 2002. Other than the requirements of the Delaware Corporation
Law that dividends be paid out of capital  surplus only and that the declaration
and  payment of a dividend  not render the  Registrant  insolvent,  there are no
restrictions on the Registrant's present or future ability to pay dividends. The
payment by the  Registrant of dividends,  if any, in the future rests within the
discretion of its Board of Directors and will depend,  among other things,  upon
the  Registrant's  earnings,   its  capital  requirements,   and  its  financial
conditions, as well as other relevant factors.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Plan of Operations

         From inception on November 12, 1999, through July 2001, the Registrant
were a development stage entertainment company without an operating history. The
Registrant received its first income from operations in July 2001, but have yet
to earn a profit. For the period from its inception through December 31, 2001,
the Registrant:

o    Implemented  a modest  private  offering of its common  stock and  borrowed
     money to fund this offering and its pre-operating activities;
o    Signed artist recording agreements with six artists including Quiet Riot;
o    released one artist from its artist recording agreement;
o    Received license rights for four additional  artists including the Bay City
     Rollers;
o    Developed and launched its website  www.bodyguardrecords.com on January 17,
     2000, which includes photos and  biographical  information from all nine of
     its artists:
o    Entered into and subsequently terminated an Internet distribution agreement
     with  Cyberretail.com,  LLC, a  non-affiliated  company,  as its  exclusive
     distributor  for the  fulfillment of orders for recorded music products and
     artist merchandise sold via the Internet or on an 800 number;
o    Entered into a written  three-year  National  Distribution  and Warehousing
     Agreement with Navarre  Corporation,  a  non-affiliated  retail and digital
     distributor of music and music products;
o    Developed,  produced  and  manufactured  CD's  for  eight  of its  then ten
     artists,  engaged in recording a CD for an additional  artist,  and pressed
     CDS for another artist on November 15, 2001;
o    Arranged for three showcases in Hoboken,  New Jersey where its artists have
     performed  live;  o Arranged a showcase for its artists to perform on March
     17, 2001 at the famous  "Stone  Pony" in Asbury  Park,  NJ. In addition the
     Registrant  arranged  for three of its  artists to  showcase at the Cutting
     Room in New York City on December 6, 2001;
o    Entered  into  a  preliminary   distribution   agreement   with  Mac  Milli
     Entertainment, Inc., a non- affiliated company for the on-line promotion of
     its artists on the Mac Milli website and the  non-exclusive  fulfillment of
     digital downloaded music orders;
o    Conducted a professional  lip-sync video session shoot of Naked Underneath,
     Summer Snowmen, and Dennis DeCambre; and prepared a music video for several
     artists;
o    The Registrant  monitored Quiet Riot's performance in Grand Slam Metal Jam,
     a  scheduled  40 show  United  States  arena  concert  tour  along with the
     heavy-metal  bands Poison,  Warrant and Enuff Znuff,  that commenced on May
     26, 2001.  Due to an injury to a member of Poison,  the tour  terminated in
     late July 2001;
o    Generated  limited  credit  card and money order  revenue  from Live at the
     Budokan 1977, The Bay City Rollers CD which the  Registrant  made available
     on its web site since April 16, 2001; and
o    Released  Live  at the  Budokan  1977  to  retail  stores  through  Navarre
     Corporation on September 11, 2001.

For the four to 12 months  following the sale of at least the minimum  number of
shares in the Registrant's initial public offering,  the Registrant's  principal
objectives will be to:

o    Secure national exposure for its recording artists; and
o    Initiate and implement the sale of CD's and related merchandise with a view
     towards developing cash flow.
o    Secure a strategic marketing alliance with a nationally recognized company.

The Registrant intends to initiate this process during the first weeks following
the closing of at least 200,000 shares  offered in its initial public  offering,
and to  continue  for  at  least  four  months.  the  Registrant  intend  to use
approximately  $25,000 of the $450,000 net proceeds from such offering per month
to:

     o    Place print ads in key music publications  including  Billboard,  Teen
          and CMJ New Music Report;

     o    Attempt to secure reviews and articles in music publications including
          Billboard,  Rolling  Stone and CMJ New  Music  Report  and in  general
          circulation magazines such as Teen and Seventeen;

     o    Attempt  to  secure  radio  airplay  on CMJ  Reporting  college  radio
          stations as well as commercial  radio  stations  throughout the United
          States.  The Registrant intend to supply program directors with a copy
          of the CD of each of its  artists  as well as a press  kit  containing
          biographies of the band members, an 8x10 glossy black and white print,
          a fact sheet and copies of any articles that have been published;

     o    Promote the  Company's  web site  through the  inclusion of all of its
          artist's  names in the  principal  search  engines,  cross  links with
          MacMilli  Entertainment,  Sennheiser  Microphones,  Ling  Lang.com and
          other corporate alliances;

     o    Attempt to utilize  Grand Slam Metal Jam,  the arena  concert  tour in
          which  Quiet  Riot  participated,  to  generate  purchases  of "Guilty
          Pleasures", Quiet Riot's first Bodyguard Records CD; and

     o    Attempt to utilize its web site to generate  purchases of "Live at the
          Budokan, 1977", the Bay City Rollers first Bodyguard Records CD.

If the  Registrant  are successful in selling only the minimum number of shares,
the Registrant will not have  sufficient  funds to commence the marketing of its
web  site  and  artists  in the  manner  described  above.  However,  and If the
Registrant is  successful  in selling more than the minimum  number of shares in
its initial public  offering,  or the Registrant  continues to receive  payments
representing  gross sales less related artists' expenses from the sale of Guilty
Pleasures,  Quiet  Riot's  first  Bodyguard  Records  CD,  or if the  Registrant
commences  receiving payments from the sale of Live at the Budokan 1977, the Bay
City Rollers first Bodyguard Records CD, the Registrant intends to spend between
$120,000 and $295,000 on marketing and promotion for up to eight months.

The Bay City Rollers CD, which has been available on the  Registrant's  web site
since April 16, 2001, has generated limited credit card and money order revenue.
The CD was  officially  released at retail stores on September 11, 2001, and the
Registrant received its first check from Navarre Corporation  representing gross
sales less related artists' expenses within 120 days thereafter.

In early September,  2001, the Registrant received a check dated August 23, 2001
from  Navarre  Corporation   representing  gross  sales  less  related  artists'
expenses.  These  funds were  utilized  to place  full color  print ads for Matt
Cheplic and Daphne Hero in College Music Journal's New Music Weekly edition;make
payments to its graphic  artist for services  performed  during July and August;
and hired a professional radio promotion consultant.

     o    Initiate the generation of cash flow from its artists other than Quiet
          Riot and the Bay City Rollers.

     The Registrant intends to initiate this process during the second month
following the closing of the sale of 200,000 of shares in its initial public
offering, and to continue for at least four months. The Registrant does not
intend to specifically utilize any of the $200,000 net proceeds from its initial
public offering per month for this purpose. Rather, the Registrant intends to
rely upon the networking skills of its three executive officers and directors.
Should the Registrant be successful in its efforts, the Registrant will
ultimately expend an unknown portion of the net proceeds from this offering on
legal fees.

In the event  the  Registrant  are  successful  in the sale of only the  minimum
number of shares in its initial public  offering,  the Registrant  believes that
the net  proceeds  of  $200,000  will  provide  sufficient  funds to enable  the
Registrant  to  satisfy  its cash  requirements  for at least four  months.  The
conduct  of  operations  beyond  this  period  will  require  either the sale of
additional shares or the commencement of cash flow.

Should  the  Registrant  be  successful  in  selling  all  400,000  shares,  the
Registrant  believes that the net proceeds of $950,000  will provide  sufficient
funds to enable the Registrant to satisfy its cash  requirements for at least 12
months  including the payment of salaries of $60,000 and the accruals of $15,000
to Messrs.  Rollo and Foley as called for in their  amended  written  employment
agreements with the Registrant.

Until the Registrant receive the proceeds of in its initial public offering, its
activities will continue to be limited.

Without these proceeds from its initial public the Registrant  will not have the
capital resources or liquidity to:

     o    Implement its business plan;
     o    Commence operations through the recording,  production or marketing of
          any record albums; or
     o    Hire any additional employees.

ITEM 7. FINANCIAL STATEMENTS

Financial statements meeting the requirements of Item 310 of Regulation S-B, for
the two fiscal  year ending  March 31,  2002 and 2001 were  audited by Sobel and
Company.

ITEM  8.  CHANGES  IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
FINANCIAL DISCLOSURE.
None

                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(a) OF THE 34 Act

(a) Identify Directors and Executive Officers.

The following table sets forth: (1) names and ages of all persons who presently
are and who have been selected as directors of the Registrant; (2) all positions
and offices with the Registrant held by each such person; (3) the term or office
of each person named as a director; and 4) any period during which he or she has
served a such:


 Name               Age       Positions and Offices Held    Director Since

 John Rollo         47        President, Shief operating    November 1999
                              Officer and Director
 Eugene Foley       34        Chief Executive Officer and   November 1999
                              Director
 Kenneth Polendine  53        Chief Financial Office,       November 1999
                              Secretary and Director
 Richard Iamunno    43        Director                      March 29, 2001

There is no  understanding  or  arrangement  between any  directors or any other
person or persons pursuant to which such  individual,  was or is to be, selected
as a  director  or  nominee  of the  Registrant.  (4)  Business  Experience  The
following is a brief  account of the  experience  of each director and executive
officers of the Registrant:

JOHN ROLLO has been the Registrant's  president,  chief operating  officer and a
director since its inception in November 1999. Simultaneously, and from February
1998 to January 5, 2001,  Mr. Rollo also served as  president  and a director of
Cream Records,  Inc., a New Jersey corporation that changed its name to Hardrive
Records.com,  Inc.,  and  which  intended  to sell  records  over the  Internet.
Simultaneously  and since  1996,  Mr.  Rollo has  served as  president  of Rollo
Entertainment  Corp., a Delaware corporation which provides and supervises music
recording  services,   offers  artist  development  and  career  guidance,   and
administers  independent A&R (artist & repertoire).  Before that and since 1982,
Mr. Rollo has been a self employed  music  industry  consultant,  engaged in the
creative  development and technical  production of musical  recordings.  In this
capacity,  he has been the recipient of Grammy awards for engineering and mixing
of Jimmy  Cliff's  "Cliffhanger",  and a second  Grammy award for  producing Joe
Cocker's contribution in "The Bodyguard" motion picture soundtrack CD for Arista
Records.  Additionally,  Mr. Rollo has earned Recording Industry  Association of
America and/or Ampex Golden Reel awards for his  involvement  with the following
music productions:

--------------------- ------------------ ------------------ ------------------
Artist                Album              Award              Contribution
--------------------- ------------------ ------------------ ------------------
Joe Cocker            The Bodyguard      Gold and           Engineer and
                      Soundtrack         Multi-Platinum     Producer
--------------------- ------------------ ------------------ ------------------
Jimmy Cliff           Cliff Hanger       Gold and           Engineer,
                                         Platinum           Producer and
                                                            Mixer
--------------------- ------------------ ------------------ ------------------
The Kinks             Phobia             Gold               Engineer
--------------------- ------------------ ------------------ ------------------
The Kinks               State of         Gold and           Engineer
                      Confusion          Platinum
--------------------- ------------------ ------------------ ------------------
The Kinks             Give The People    Gold and           Engineer and
                      What They Want     Platinum,  Ampex   Mixer
                                         Golden Reel
--------------------- ------------------ ------------------ ------------------
The Kinks             One For The        Gold and           Engineer and
                      Road               Platinum,  Ampex   Mixer
                                         Golden Reel
--------------------- ------------------ ------------------ ------------------
The Kinks             Low                Gold and           Engineer and
                      Budget             Platinum,          Mixer
                                         Ampex Golden
                                         Reel
--------------------- ------------------ ------------------ ------------------
The Kinks             Superman            Gold and         Engineer and
                                          Platinum           Mixer

--------------------- ------------------ ------------------ ------------------
Joe Cocker            Unchain My         Gold and           Engineer and
                      Heart              Platinum           Mixer
--------------------- ------------------ ------------------ ------------------
Joe Cocker            One Night of       Gold and           Engineer and
                      Sin                Platinum           Mixer
--------------------- ------------------ ------------------ ------------------
Eric Clapton          Knocking On        Gold and           Engineer and
                      Heaven's Door      Platinum           Mixer
--------------------- ------------------ ------------------ ------------------
 Leslie McKeown       All Washed Up      Gold and           Engineer and
                                         Platinum,          Mixer
                                         Ampex Golden Reel
--------------------- ------------------ ------------------ ------------------
Kool & The Gang         Fresh            Gold and           Remixed
                                         Platinum
--------------------- ------------------ ------------------ ------------------
The Sweet             Sweet Fanny        Gold and           Engineer
                      Adams              Platinum
--------------------- ------------------ ------------------ ------------------
Bonnie Tyler          Secret Dreams and  Gold               Producer and
                      Forbidden Fire                        Engineer
--------------------- ------------------ ------------------ ------------------

The Recording  Industry  Association of America is the generally  recognized and
accepted industry  association for sales  certification  purposes.  Ampex Golden
Reel Awards are  presented to recording  studios,  producers  and  engineers who
participate  in an album  that was  recorded  on Ampex  reel to reel  tape,  and
reaches the "gold"  milestone of 500,000  units sold.  Mr. Rollo has signed many
new artists to major labels both in England and the United States.  Once signed,
Mr. Rollo worked with the artists in order to develop songs,  produce recordings
and overseeing  progress  through the various  creative phases leading up to and
including  final  contract  negotiations.  In  addition  to these  Grammy  award
winners,  Mr.  Rollo has been  engaged  as  producer  and/or  engineer  with the
following  recognized  recording  artists:  Joe Cocker,  Jimmy Cliff;  Southside
Johnny & the Asbury Jukes,  Phoebe Snow,  Bonnie Tyler,  Paul Young,  The Kinks,
Eric Clapton,  George Benson, Kool & the Gang, O'Jays,  Stevie Nicks and Gang of
Four. In addition to Mr. Rollo's independent  activities,  he has acted as chief
engineer  and  record  producer  for the House of Music,  then  located  in West
Orange, New Jersey, from 1985-1990.

GENE FOLEY has been the  Registrant's  chief  executive  officer  and a director
since its inception in November 1999. Simultaneously,  and from February 1998 to
November 2000, Dr. Foley also served as chief  executive  officer and a director
of Cream Records, Inc., that changed its name to Hardrive Records.com, Inc., and
which  intended to sell  records over the  Internet.  Before that since 1988 Dr.
Foley has served as the  president  of Foley  Entertainment,  a privately  owned
music  industry  consulting  firm in New Jersey which was  incorporated  in 1994
under the name Foley  Entertainment,  Inc. Dr. Foley received a bachelor of arts
degree in political science from Kean University, Union, New Jersey, in 1991. In
1993,  Dr. Foley  received a masters  degree in  political  science from Pacific
Western  University,  New Orleans,  LA. In 1994,  Dr. Foley received a doctor of
philosophy  degree in political  science from the same university.  In 1994, Dr.
Foley  received  a  Juris  doctor  degree  in law  from  Kensington  University,
Glendale,  CA.  Dr.  Foley's  book "How To Make It In Music In Six  Months...and
Eighteen  Years" was  co-written  with Steve Parry, a former  Columbia  Records'
recording  artist.  Dr.  Foley's  clients  have earned one Grammy award and four
Recording  Industry  Association  of America gold record awards and one platinum
award.  Dr. Foley has  contributed to music related  features on NBC, MTV, VH-1,
PBS, Fox and in Forbes  magazine.  His clients have been involved in projects in
various capacities with numerous major labels including Columbia, RCA, Atlantic,
Warner Bros., EMI, Polygram,  Capitol,  Arista,  Elektra,  A&M, Epic, Geffen and
Sony.

KENNETH POLLENDINE, has been the Registrant's chief financial officer, secretary
and a director  since its inception in November 1999.  Simultaneously,  and from
February 1998 to November 2000, Mr.  Pollendine  also served as chief  financial
officer,  secretary  and a  director  of  Cream  Records,  Inc.,  a  New  Jersey
corporation  that  changed its name to  Hardrive  Records.com,  Inc.,  and which
intended  to sell  records  over the  Internet.  Before  that  since  1994,  Mr.
Pollendine  was a private  entertainment  and music  consultant  in London,  UK,
providing  short term freelance  services to a variety of artists and companies.
Before that and since 1986, Mr. Pollendine was employed by Oracle Corporation, a
multinational manufacturer and distributor of computer software, in increasingly
responsible  positions  including general manager and chief executive officer of
Oracle's Southern England operations. Mr. Pollendine received a bachelor of arts
degree in mathematics from Open University, London, UK in 1979.

RICHARD A. IAMUNNO,  has been a director of the Registrant since March 29, 2001.
Simultaneously,  and since  1994,  Mr.  Iamunno  has been a director of Atlantic
International  Capital Holdings, a Bermuda based financial services company with
offices  in  both  Florida  and   Bermuda,   and  its   president   since  2001.
Simultaneously,  and from 1995 to 2000,  Mr. Iamunno served as the president and
chief  executive  officer of Online  Gaming  Systems,  Ltd.,  a  publicly  owned
interactive gaming company  headquartered in Las Vegas,  Nevada, with offices in
South Florida,  Sydney,  Australia and Johannesburg,  South Africa.  Before that
from 1988 to 1994, Mr. Iamunno was the  president,  of Ameristar  International,
Inc.,  a New York  based  financial  services  company.  From 1984 to 1988,  Mr.
Iamunno  was  employed by the  Information  Services  division of Western  Union
Corporation  as a Senior  Director,  where he managed and directed the marketing
department  for all on-line based  information  service  products.  From 1981 to
1984,  Mr.  Iamunno  was  employed  as a  Marketing  Manger by Dun &  Bradstreet
corporation.  Mr. Iamunno attended Drake University, Des Moines, Iowa, from 1976
to 1979.

(5)  Directorship   Each  Director  of  the  Registrant  has  indicated  to  the
     Registrant  that  he or  she is  not  presently  a  director  in any  other
     registrant with a class of securities  registered pursuant to Section 12 of
     the 34 Act or subject to the  requirements  of Section 15(d) of such act or
     any investment company registered under the Investment Company Act of 1940.

     (b)  Identification  of Certain  Significant  Employees The Registrant does
          not presently  employ any person as a significant  employee who is not
          an  executive  officer  but  who  makes  or  is  expected  to  make  a
          significant contribution to the business of the Registrant.

     (c)  Family  Relationships  Except for the fact that John Rollo and Kenneth
          Pollendine are first cousins,  no family  relationship  exists between
          any of officer or director of the Registrant.

     (d)  Involvement   in  Certain  Legal   Proceedings   No  event  listed  in
          Sub-paragraphs  (1)  through  (4) of  Subparagraph  (d) of Item 401 of
          Regulation  S-B,  has occurred  with respect to any present  executive
          officer or director  of the  Registrant  or any  nominee for  director
          during the past five years which is material to an  evaluation  of the
          ability or integrity of such director or officer.

ITEM 10. EXECUTIVE COMPENSATION.

(a) General

(1) through (7) All Compensation Covered. During the fiscal year ended March 31,
2002,  no  compensation  was paid to,  accrued  or set aside  for any  executive
officer or director of the Registrant.

(b) Summary Compensation Table.

             Annual Compensation                        Long-Term   Compensation
                                                        Awards           Payouts
------------- -------- ------- ------ ---------   ------- -------  ------- -----

                                                Restri-  Secur-
               Fiscal                           cted    ities
               Year                 Other       Stock   Under-           All
Name and       Ended                Annual      Awards  lying    ltip    Other
Principal      March Salary  Bonus  Compen-             Options/ Pay     Compen-
Position       31       (1)         sation (2)          Sar's    Outs    sation
-------------- ----- ------- ------ ----------- ------- ------   ------ --------
John Rollo
President
and Chief      2000  $28,750    -    $28,479
Operating      2001   75,000    -     58,774
Officer        2002
-------------- ----- ------- ------ ----------- ------- ------   ---- ----------
Eugene Foley   2000  $28,750    -    $28,479
Chief          2001   75,000    -     58,774
Executive      2002
Officer
-------------- ----- ------- ------ ----------- ------- ------   ---- ----------
Kenneth        2000        -    -          -          -      -      -          -
Pollendine     2001        -    -          -          -      -      -          -
Chief          2002        -    -          -          -      -      -          -
Financial
Officer
-------------- ----- ------- ------ ----------- ------- ------   ---- ----------

(1) Pursuant to the Registrant's  written employment  agreements with John Rollo
and  Eugene  Foley,  as  amended,  and as  described  below  under  the  caption
"Employment Agreements", all salary and wages were waived until the closing date
of  this  offering.  However,  and in  accordance  with  Topic  1B of The  Staff
Accounting  Bulletins,  the reasonable  cost of doing business has been recorded
with the  intention  that Messrs Rollo and Foley were donating  their  salaries.
Accordingly,  an expense was recorded  with an  corresponding  credit to paid in
capital as donated capital. See Note 6 to Notes to Financial Statements.

(2) Represents  funds that were advanced and reimbursed for the  development and
expenses incurred on behalf of the Registrant and its roster of artists; and for
promotional,  marketing  and related  services and  expenses.  The  Registrant's
verbal agreements  included the  understanding  that the payment of compensation
for services and the advancement and  reimbursement of expenses would cease upon
the closing of the Registrant's initial public offering.

     During the fiscal  years ended March 31,  2000 and 2001,  Messrs  Rollo and
Foley each  waived  $28,479 and  $75,000,  respectively,  representing  salaries
donated from  inception  through  March 31, 2001.  Messrs.  Rollo and Foley have
further  agreed to accrue  $15,000 or 20% of their  $75,000  first year's annual
salary under certain circumstances.  Accordingly, and if and when the Registrant
close on the  minimum  number of  shares of its  common  stock,  the  Registrant
intends  to  commence  paying  salaries  to John Rollo and Gene Foley of $60,000
under their  employment  agreements and accruing $15,000 for the first year. The
Registrant  also  intend to  commence  paying a salary  of  $60,000  to  Kenneth
Pollendine for the first full year following such closing. The Registrant has no
written  employment  agreement  with  Mr.  Pollendine,  and has not paid him any
salary or other compensation.

     For financial statement purposes through September 30, 2001, the Registrant
has reflected all executive  compensation  under its employment  agreements with
Messrs.  Rollo and  Foley as  donated  salaries  offset  to  additional  paid in
capital.

(c)  Option/SAR  Grant Table.  During the fiscal year ended March 31, 2002,  the
Registrant made no grants of stock options or freestanding  SAR's.

(d) Aggregate  Option/SAR  Exercises and Fiscal Year-End Option/SAR Value Table.
No stock options or freestanding  SAR's are issued or outstanding.  Accordingly,
and  during  the  fiscal  year  ended  March  31,  2001,  no  stock  options  or
freestanding SAR's were exercised.  Notwithstanding the foregoing,  an aggregate
of 150,000 shares of the  Registrant's  Common Stock,  $.001 par value per share
are reserved for issuance pursuant to the Registrant's  long-term incentive plan
adopted by the  Registrant's  Board of Directors  and  stockholders  in November
2000.


(e) Long-Term Incentive Plan ("LTIP") Awards Table. During the fiscal year ended
March 31, 2002, the Registrant made no LTIP awards.

(f)  Compensation of Directors.  (1) and (2). During the fiscal year ended March
31,  2001,  no director of the  Registrant  received any  compensation,  whether
pursuant to any  standard or other  arrangement  or  otherwise.

(g) Employment  Contracts and Termination of Employment,  and Change-in  Control
Arrangements.  (1) and (2).  On December  1, 1999  Messrs.  Rollo and Foley each
entered into three year written employment  agreements with the Registrant which
were  amended on June 7, 2000,  June 1, 2001,  December 17, 2001 and January 25,
2002. Under these  employment  agreements,  as amended,  both men have agreed to
waive any and all right  they may have had to receive  any form of  compensation
from the Registrant, including advances and reimbursements,  or any compensation
which may have accrued under their original agreements until the closing date of
the Registrant's initial public offering.  In addition,  both men have agreed to
defer the commencement of their employment  agreements with the Registrant until
the closing date of the Registrant's initial public offering.  Finally, both men
further  agreed to accept  salaries of $75,000  for the first year  subject to a
cost of living  adjustment  in each of the two  following  years,  together with
customary  health  benefits,   three  weeks  vacation  and  accountable  expense
reimbursement provisions. However, and in the event the Registrant sell only the
minimum number of shares in its initial public offering,  both Messrs. Rollo and
Foley have agreed to accept  $60,000 as their  first years  salary and to accrue
the remaining  $15,000 or 20% of their  $75,000  salary until the earlier of the
raising of  additional  capital or the  generation of positive cash flow. In the
event the  Registrant  are unable to raise  additional  capital or  generate  of
positive cash within 24 months,  its  obligation to pay Messrs.  Rollo and Foley
their first years accrued salary shall  automatically  lapse.  In addition,  and
subject to the sale of at least the minimum  number of shares its initial public
offering,  the Registrant has agreed to pay Messrs. Rollo and Foley each a bonus
if and when any of its artists  reach  certain  levels of net CD sales under the
Registrant's  artist  agreements.  All bonuses  will be  cumulative  and payable
within 30 days after confirmation of CD sales as follows:

                   No. of CD's Sold                    Cash Bonus
                   -----------------                   ----------
                      100,000                           $10,000
                      250,000                            25,000
                      500,000                            50,000
                    1,000,000                           100,000

     As an example, if the Registrant's artists were to sell 1,500,000 CD's, the
Registrant would be required to pay a bonus of $185,000, i.e., $10,000 + $25,000
+  $50,000 +  $100,000,  each to John  Rollo and  Eugene  Foley.

(h) Report on Repricing of Options/SAR's. No stock options or freestanding SAR's
are issued or outstanding.  Accordingly,  and during the fiscal year ended March
31, 2002, no stock options or freestanding SAR's were repriced.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

(a) Security Ownership of Certain Beneficial Owner. The information is furnished
as of July __,  2002,  as to the  number of shares  of the  Registrant's  Common
Stock, $.01 par value per share, owned beneficially,  or known by the Registrant
to own  beneficially,  more  than 5% of any  class  of such  security:


Name and Address                    Amount and Nature
of Beneficial                         of Beneficial
Owner                                   Ownership           Percentage of Class

Rollo Entertainment Corp.
56 Colfax Avenue
Clifton, New Jersey 07015                   200,000                    22%

Eugene Foley
56 Colfax Avenue
Clifton, New Jersey 07015                   200,000                    22%

Ellen Rosenberg
PO Box 1223
Long Beach, NY 11561                        150,000                    17%

(b) Security  Ownership of Management.  The  information is furnished as of July
__, 2002, as to the number of shares of the Registrant's Common Stock, $.001 par
value per share owned beneficially by each executive officer and director of the
Registrant and by all executive officers and directors as a group:


Name and Address                Amount and Nature
of Beneficial                     of Beneficial
Owner                               Ownership               Percentage of Class

John Rollo (1)
56 Colfax Avenue
Clifton, New Jersey 07015           200,000                   22%

Eugene Foley
56 Colfax Avenue
Clifton, New Jersey 07015           200,000                   22%

All Officers
And Directors
as a Group of
four  persons                       400,000                   44%

(1) John Rollo is the sole executive officer,  director and stockholder of Rollo
Entertainment  Corp.,  a Delaware  corporation  that is the record  owner of the
200,000 shares referenced in the foregoing table.

(c) Changes in Control.  None


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

(a)(b) On December 6, 1999, the Registrant issued an aggregate of 200,000 shares
to Rollo Entertainment,  Corp., a Delaware  corporation  controlled by and under
common  control of John  Rollo,  its  President,  and a director  and  principal
stockholder.  The Registrant valued the 200,000 shares at $50, which represented
the fair market  value of the stock at the time of issuance.  In  addition,  Mr.
Rollo has provided the following:

     1.Rollo  Entertainment's  granting to the Registrant the two year right and
     license to utilize its New York City recording  studio and equipment with a
     maximum fair market value of $600,000,  which  represents an hourly rate of
     $150 and a maximum use of 35 hours per week.  From  inception  through June
     30, 2001,  the equipment and studio was used for  approximately  916 hours.
     Based upon the number of hours used at a fair  market  rate,  the  services
     provided by Rollo Entertainment to the Registrant  represented an aggregate
     of $137,336.  The value of these donated services were offset to additional
     paid in capital.

     2.Rollo  Entertainment  assigned its sublease  agreement to the Registrant.
     Rollo   Entertainment  is  100%  controlled  by  John  Rollo,  a  principal
     shareholder,  director and officer of the Registrant.  Despite the terms of
     its  sublease   with  Rollo   Entertainment,   the   Registrant   paid  the
     non-affilaited  landlord at 138 Fulton Street in New York City an aggregate
     of $2,000 per month for rent,  or an aggregate of $22,000.  From July 2000,
     to August 31, 2001, the Registrant were the only tenant utilizing the space
     at 138 Fulton Street in New York City.  The material  terms of the sublease
     were as follows:

     Remaining term: Until August 31, 2001;

     Rent: Started at $1946 and escalated to $2024 by the end of the term;

     Additional  Costs:  Bodyguard  paid  $400 per  month  for  electricity  and
     maintenance fees; and maintaining liability insurance on the premises.


The Registrant's  sublease with Rollo  Entertainment  and Rollo  Entertainment's
master lease with the landlord at 138 Fulton  Street in New York City expired on
August 31, 2001.

On December 6, 1999,  the  Registrant  issued an aggregate of 200,000  shares to
Gene Foley, its chief executive officer, a director and a principal stockholder.
the Registrant valued the 200,000 shares at $50, since the shares were issued in
consideration for Mr. Foley's  contribution to the Registrant of an aggregate of
$50 in cash.

On January 21, 2000,  the  Registrant  issued an aggregate of 190,000  shares to
three non-affiliated individuals in consideration for an aggregate of $25,000 in
cash in order to launch its website and to commence this offering. Each of these
individuals  agreed not to publicly sell any of their shares of its stock for 24
months.  Later, and on various dates between February,  2000 and June, 2000, the
Registrant  sold an aggregate of 310,000 shares for $.20 per share to a group of
six  accredited  investors In a private  placement in order to raise  $62,000 to
finalize the construction of the Registrant's  website, to conduct this offering
and commence  operations.  On various  dates between July 15, 2000 and March 15,
2001,  the  Registrant  borrowed an  aggregate of $185,000  from two  accredited
persons in order to stay in  business  until the  Registrant  could  conduct its
initial public  offering.  The $80,000 the Registrant  borrowed between July 15,
2000 and  December  1,  2000,  was  pursuant  to five  separate  short term loan
agreements at 12%. On February 1, 2001, the Registrant entered into an agreement
extended the due date of three of these loans,  aggregating  $40,000,  until the
earlier of July 31, 2001,  or the closing date of its initial  public  offering.
The $105,000 the Registrant borrowed between January 4, 2001 and March 15, 2001,
was pursuant to five separate 13 month  convertible  loan  agreements at 9% that
grant  the same  individual  holder  the  right to  convert  the  loans  into an
aggregate of 105,000 shares at $1.00 per share at any time after the termination
of this offering but before the respective due dates of the loans.  On April 24,
2001,  the  Registrant  borrowed an  aggregate  of $100,000  from an  accredited
investor  pursuant to a 13 month loan agreement.  The Registrant uses this money
as working  capital  until the  Registrant  could  conduct  its  initial  public
offering.  On April 5, 2001,  July 3, 2001,  August 6, 2001 and August 28, 2001,
the Registrant borrowed an aggregate of $70,000 from one accredited  individual.
These loans are each for a term of 13 months at 11% per annum with  interest and
principal due in one lump sum on the respective due dates. On May 30, 2001, July
10, 2001 and August 10, 2001,  the  Registrant  borrowed an aggregate of $75,000
from one  entity.  These loans are for a term of 13 months at 12% per annum with
interest  and  principal  due in one lump sum on the  respective  due dates.  On
October 16, 2001, the Registrant  borrowed $15,000 from one of the note holders,
who had previously  loaned the Registrant money. The note was for four months at
13% per annum. On November 14, 2001 and January 3, 2002 one of the note holders,
who had  previously  loaned  the  Registrant  money,  loaned the  Registrant  an
additional $20,000 on November 14, 2001, and $20,000 on January 3, 2002. Each of
these two notes was for six  months at 15% per  annum.  In  addition,  this note
holder  verbally  agreed to wait for payment until the  respective six month due
dates of these two notes.

On  March  29,  2002,  the  three  non-related  holders  of  18  separate  notes
aggregating  $390,000 in indebtedness  from the Registrant  agreed to extend the
due dates of these  loans  until  August  31,  2002 or the  closing  date of the
Registrant's   initial   public   offering  under  and  pursuant  to  Form  SB-2
Registration Statement No. 333-40444.

The Registrant's sublease at 138 Fulton Street, was personally guaranteed by its
president,  John Rollo,  was assigned to the Registrant by Rollo  Entertainment,
Corp.,  a Delaware  corporation  controlled by and under common  control of John
Rollo.  As  previously  stated,  this  sublease  expired on August 31, 2001.  On
February 21, 2001,  the Registrant  entered into a 20 year  licensing  agreement
with Atlantic  International Capital Holdings, a Bermuda corporation  controlled
by or under common control of Richard Iamunno,  who thereafter became a director
of the Registrant on March 29, 2001 ("AICH").  No money was paid to AICH before,
on or after the execution of this agreement.  The licensing agreement covers its
worldwide  right  to  utilize  the  names,  artwork  negatives,   likenesses  or
biographies  of  the  artists  and  the  master   recordings  of  three  of  the
Registrant's  new  artists,  Matt  Cheplic,  Daphne  Hero  and Jake  Thomas  for
virtually  all  commercial  and  promotional   purposes.   Under  the  licensing
agreement,  the Registrant  agreed to pay AICH a royalty of ten percent (10%) of
the Registrant's  net-after-recoupment income for each record or CD manufactured
and sold at retail outlets or via digital  distribution  and featuring the three
artists covered by the licensing agreement. The Registrant's recoupable expenses
include all  recording  studio time,  mastering  services,  compact disc and DVD
manufacturing costs,  engineering fees, graphic design,  photography,  publicist
fees, print advertising,  session musician costs, advances,  salary or financial
compensation  of  any  kind,  food,  fuel  and  accommodation   expenses  during
promotional  appearances  and  touring;  and fifty  percent of the cost of a any
promotional video and cable television commercial, that the Registrant elects to
film.

On February  21, 2001,  the  Registrant  also  entered into a 12 year  licensing
agreement with AICH. No money was paid to AICH before, on or after the execution
of this agreement.  This licensing  agreement covers the Registrant's  worldwide
right to utilize:  (i)multitrack  tape or  two-track  stereo  master tape either
mixed from or recorded from the original  multitrack  tape comprising the master
recordings  of the music  comprising  the Live at the Budakon,  1977  commercial
sound recording by the Bay City Rollers;  (ii) all right,  title and interest in
and to the artist recording  agreement with Webnet  International,  Inc., LLC, a
Delaware  limited  liability  company  providing  the  services  of the Bay City
Rollers underlying and giving rise to the master recording, including the single
option  for  an  additional   master   recording;   and  (iii)  the  rights  and
responsibilities  pertaining  to the  master  recording  under a  certain  joint
venture   agreement   dated  December  10,  1999  with   Exploration,   Inc.,  a
non-affiliated  Utah  corporation,  for virtually all commercial and promotional
purposes.  Under the licensing  agreement,  the Registrant  agreed to pay AICH a
royalty of ten percent (10%) of the Registrant's net-after-recoupment income for
each  record  or CD  manufactured  and sold at  retail  outlets  or via  digital
distribution  and  featuring  the Live at the  Budakon,  1977  commercial  sound
recording  by Bay City  Rollers  and  covered by the  licensing  agreement.  The
Registrant's  recoupable  expenses include all recording studio time,  mastering
services,  compact disc and DVD manufacturing  costs,  engineering fees, graphic
design, photography,  publicist fees, print advertising, session musician costs,
advances,  salary  or  financial  compensation  of  any  kind,  food,  fuel  and
accommodation  expenses during  promotional  appearances and touring;  and fifty
percent of the cost of a any promotional video and cable television  commercial,
that the Registrant elects to film.

Between April 2000, and September 30, 2001, and pursuant to two agreements  that
initially  were  verbal  and which,  on  January  25,  2002,  were  subsequently
confirmed  in  writing  as  amendments  to  their  employment  Agreements,   the
Registrant advanced an aggregate of $174,506 to:(i) Rollo Entertainment Corp., a
Delaware  corporation of which John Rollo,  an executive  officer,  director and
principal  stockholder  of the  Registrant  is the sole  officer,  director  and
stockholder;  and (ii) Foley  Entertainment,  Inc., a New Jersey  corporation of
which Eugene Foley, an executive officer,  director and principal stockholder of
the Registrant,  is the sole officer,  director and stockholder.  The funds were
advanced and  reimbursed  to the two entities for the  development  and expenses
incurred  on  behalf  of the  Registrant  and its  roster  of  artists;  and for
promotional,  marketing and related  services and  reimburseable  expenses.  The
Registrant  verbal  agreements  included the  understanding  that the payment of
compensation  for services and the  advancement  and  reimbursement  of expenses
would cease upon the  closing of its  initial  public  offering.  As  previously
indicated,  and during the fiscal  year ended  March 31,  2001,  the  Registrant
advanced an  aggregate of $58,774 each to Rollo  Entertainment  Corp.  and Foley
Entertainment,  Inc. During the fiscal year ended March 31, 2000, the Registrant
advanced an  aggregate of $28,479 each to Rollo  Entertainment  Corp.  and Foley
Entertainment, Inc.

On February 15, 2002, one of the note holders who  previously  lent money to the
Registrant  advanced  an  additional  $10,000  for four months at 15% per annum.
Thereafter,  and on March 8, 2002,  March 15, 2002 and June 20,  2002,  the same
note holder  advanced  $15,000,  $5,000 and  $10,000,  respectively,  at 12% per
annum.  Both March  notes were for a term of three  months and the June note was
for a term of two months. On March 29, 2002, the same note holder entered into a
written note extension  agreement  with the  Registrant  wherein the note holder
extended  the  due  date  of the  Registrant's  16  overdue  notes,  aggregating
$270,000,  until the  sooner  of  August  31,  2002 or the  closing  date of the
Registrant's   initial   public   offering  under  and  pursuant  to  Form  SB-2
Registration Statement No. 333-40444.

On March  29,  2002,  the  Registrant  entered  into a  written  note  extension
agreement  with the holder of the  Registrant's  10%,  13 month,  $100,000  loan
agreement  dated April 25, 2001 and due May 25, 2002.  The  extension  agreement
extended the due date until the sooner of August 31, 2002 or the closing date of
the  Registrant's  initial  public  offering  under  and  pursuant  to Form SB-2
Registration Statement No. 333-40444.

On March  29,  2002,  the  Registrant  entered  into a  written  note  extension
agreement  with the  holder of the  Registrant's  12%,  13 month,  $25,000  loan
agreement  dated May 31, 2001 and due June 31,  2002.  The  extension  agreement
extended the due date until the sooner of August 31, 2002 or the closing date of
the  Registrant's  initial  public  offering  under  and  pursuant  to Form SB-2
Registration Statement No. 333-40444.

(c) Parents. The following  individuals and entities may be deemed to be parents
of the  Registrant  as at March 31,  2002:  (I) Rollo  Entertainment,  Corp.,  a
Delaware  corporation that is the record and beneficial owner of an aggregate of
200,000 shares of the  Registrant's  Common Stock;  (ii) Eugene Foley who is the
record  and  beneficial   owner  of  an  aggregate  of  200,000  shares  of  the
Registrant's  Common  Stock;  and (ii)  Ellen  Rosenberg  who is the  record and
beneficial  owner of an aggregate of 150,000 shares of the  Registrant's  Common
Stock.

(d) Transactions with Promoters. Inapplicable.

ITEM 13.  EXHIBITS, LIST AND REPORTS ON FORM 8-K
(a)        Exhibits and Index Required

EXHIBIT
NUMBER     DESCRIPTION
(3)(i)     Certificate of Incorporation as filed November 12, 1999*
(3) (ii)   By laws*
(4)        Specimen Common Stock Certificate (defining rights)*
(5)        Opinion of Lester Yudenfriend, Esq.*
(10)       Material Contracts
(10)a    Equipment Lease with Rollo Entertainment Corp.*
(10)b    March 27, 2000 Sublease Assignment from Rollo Entertainment Corp.*
(10)c    Internet Distribution Agreement with Cyberretail.com, LLC*
(10)d    Artist recording Agreement with Naked Underneath*
(10)e    Artist recording Agreement with Dennis DeCambre *
(10)f    Artist recording Agreement with Summer Snowmen *
(10)g    Employment Agreement with John Rollo *
(10)h    Employment Agreement with Eugene Foley *
(10)i    2000 Long Term Incentive Plan *
(10)j    Amendment to Employment Agreements with John Rollo and Eugene Foley *
(10)k    September 26, 2000 Artist Recording Agreement with June *
(10)l    November 11, 2000 Agreement with Mac Milli Entertainment, Inc.*
(10)m    Form of private offering Subscription Agreement *
(10)n    Executed Escrow Agreement *
(10)o    September 26, 2000 Artist recording Agreement with Dean Davidson *
(10)p    January 18, 2001 National Distribution Agreement with Navarre Corp.*
(10)q    January 18, 2001 Financing Agreement with Navarre Corp.*
(10)r    January 18, 2001 CD Manufacturing Agreement with Navarre Corp.*
(10)s    January 18, 2001 Printing Manufacturing Agreement with Navarre Corp.*
(10)t    January 8, 2001 Artist Recording Agreement with Quiet Riot *
(10)u    Revised form of Subscription Agreement for this Offering *
(10)v    Convertible loan agreement with James T. Patten dated January 4, 2001*
(10)w    Convertible loan agreement with James T. Patten dated January 26, 2001*
(10)x    Loan extension agreement with James T. Patten dated February 1, 2001 *
(10)y    Convertible loan agreement with James T. Patten dated February 8, 2001*
(10)z    License agreement with Atlantic International Capital Holdings dated
         2/21/01 *
(10)AA   License agreement with Atlantic International Capital Holdings dated
         2/21/01
(10)bb   Convertible loan agreement with James T. Patten dated March 1, 2001 *
(10)cc   Convertible loan agreement with James T. Patten dated March 15, 2001 *
(10)dd   Termination Agreement with Cyberretail.com, LLC dated April 9, 2001 *
(10)ee   Loan Agreement with Joseph Salerno dated April 24, 2001 *
(10)ff   Intentionally omitted
(10)gg   Loan Agreement with James T. Patten dated April 5, 2001 *
(10)hh   Loan Agreement with The Gable Investment Trust dated May 31, 2001 *
(10)ii   Reconfirmed Amendment to Employment Agreements dated June 1, 2001*
(10)jj   Loan Agreement with James T. Patten dated July 3, 2001 *
(10)kk   Loan Agreement with The Gable Investment Trust dated July 10, 2001 *
(10)ll   Loan Agreement with James T. Patten dated August 6, 2001 *
(10)mm   Loan Agreement with The Gable Investment Trust dated August 10, 2001 *
(10)nn   Loan Agreement with James T. Patten dated August 28, 2001 *
(10)oo   Amendment to Employment Agreements dated December 17, 2001 *
(10)pp   Notice of issuance of service mark dated November 13, 2001 *
(10)qq   Loan Agreement with James T. Patten dated November 14, 2001*
(10)rr   Loan Agreement with James T. Patten dated January 3, 2002*
(10)ss   Amendment to Employment Agreements dated December January 25, 2002*
(10)tt   Loan Agreement with James T. Patten dated February 15, 2002 **
(10)uu   Loan Agreement with James T. Patten dated March 8, 2002 **
(10)vv   Loan Agreement with James T. Patten dated March 15, 2002 **
(10)ww   Loan Agreement with James T. Patten dated June 20, 2002 **
(10)xx   Loan extension agreement with James T. Patten dated March 29, 2002 **
(10)yy   Loan extension agreement with The Gable Investment Trust dated
         March 29, 2002 **
(10)zz   Loan extension agreement with Joseph Salerno dated March 29, 2002 **

(10) aaa Non-exclusive Internat License Agreement with Magic Music dated
         February 21, 2002 **
(10) bbb Assignment Agreement with PARC Records, Inc. dated March 14, 2002 **
(10) ccc License Agreement with Acrobat Music & Media Ltd. dated
         June 18, 2002 **
(23)     Consent of Sobel & Co., LLC**

*          Filed with Form SB-2 Registration Statement No. 333-40444.
**         Filed herewith
(b)        Reports on Form 8-K
           No Form 8-K was filed during the fiscal year ended March 31, 2002.

                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) of the Securities  Exchange
Act of 1934,  the  Registrant  has duly  caused  this Report to be signed on its
behalf by the  undersigned  thereunto duly  authorized,  in the Town of Clifton,
State of New Jersey, on August, 2002.

BODYGUARD RECORDS.COM, INC.

BY: _____________________________
    John Rollo, President

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


-----------------------------
John Rollo, Director



------------------------------
Eugene Foley, Director
Dated: August, 2002
Clifton, New Jersey

------------------------------
Kenneth Pollendine, Director
Dated: August, 2002
London, England

-------------------------------
Richard Iamunno
Dated: August, 2002
Boca Raton, Florida


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




                           BODYGUARD RECORDS.COM, INC.

                              FINANCIAL STATEMENTS

                             MARCH 31, 2002 AND 2001




                          BODYGUARD RECORDS.COM, INC.

                            MARCH 31, 2002 AND 2001



CONTENTS



Independent Auditors' Report.............................................

Financial Statements:

    Balance Sheet........................................................

    Statements of Operations.............................................

    Statements of Stockholders' Deficiency...............................

    Statements of Cash Flows.............................................

Notes to Financial Statements............................................




                          INDEPENDENT AUDITORS' REPORT


To the Stockholders
Bodyguard Records.com, Inc.
Clifton, New Jersey


We have audited the accompanying balance sheet of Bodyguard Records.com, Inc. as
of March  31,  2002 and the  related  statements  of  operations,  stockholders'
deficiency,  and cash flows for the fiscal  years ended March 31, 2002 and 2001.
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 conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of Bodyguard Records.com,  Inc. as
of March 31,  2002 and the  results  of its  operations  and cash  flows for the
fiscal  years  ended  March  31,  2002 and 2001 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 9 to the
financial  statements,  the Company has incurred losses from its inception,  has
significant  negative  working  capital  and net worth and is in  default on the
majority of its notes payable.  These factors raise  substantial doubt about the
Company's ability to continue as a going concern.  Management's  plans regarding
those matters are described in Note 9. These financial statements do not include
any adjustments that might result from the outcome of this uncertainty.



/s/ Sobel & Co., LLC
Certified Public Accountants
Livingston, New Jersey
July 8, 2002



                             BODYGUARD RECORDS.COM
                                 BALANCE SHEET
                                 MARCH 31, 2002


                                     ASSETS

CURRENT ASSETS:

  Cash                                                        $    2,985
  Accounts receivable                                             13,675
  Inventory                                                       10,056
                                                                --------
    Total current assets                                          26,716


FIXED ASSETS, net of accumulated depreciation of $767              4,025

SECURITY DEPOSIT                                                     100
                                                                --------
                                                               $  30,841
                                                                ========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITES:

  Current portion of long-term debt                            $ 170,000
  Current portion of long-term debt, related party               330,000
  Accrued interest expense                                        18,567
  Accrued interest expense, related party                         30,648
  Accounts payable and accrued expenses                           66,699
                                                                --------
    Total current liabilities                                   615,914
                                                                --------
Notes payable - net of current portion                                --

COMMITMENTS AND CONTINGENCIES

                              STOCKHOLDERS' EQUITY

  Preferred stock, $0.01 par value, 2,000,000
   shares authorized, none issued and outstanding                     --
  Common Stock, $0.001 par value, 20,000,000
   shares authorized, 900,000 issued and outstanding                 900
  Additional paid-in capital                                     590,700
  Accumulated deficit                                        ( 1,176,673)
                                                              ----------
    Total stockholders' equity                               (   585,073)
                                                              ----------
                                                             $    30,841
                                                              ==========

                             BODYGUARD RECORDS.COM
                            STATEMENT OF OPERATIONS

                                                     For the Fiscal Year Ended
                                                             March 31,
                                                     2002               2001
                                                     --------------------------

Net Sales                                          $ 128,552          $ 4,662

Cost of goods sold                                    46,836               --
                                                     --------------------------
Gross Profit                                          81,716            4,662

OPERATING EXPENSES:
  Officers' compensation                             150,000          150,000
  Equipment lease expense                             16,792           40,000
  Rent                                                18,251           24,000
  Insurance                                            4,756            3,261
  Artist expense                                      59,920          118,263
  Promotion expense                                  146,608           50,200
  Production expense                                  16,195            1,177
  Office supplies                                      4,323            1,006
  Advertising                                         40,937            6,450
  Studio supplies                                      8,865            3,377
  Professional fees                                   63,781           34,300
  Public relations                                    12,000               --
  Travel                                               8,248            5,823
  Telephone                                            9,003            5,102
  Depreciation expense                                   767               --
  Entertainment                                        2,600            3,828
  Trademarks and copyrights                            1,175              500
  Website design                                       3,480               --
  Moving expense                                       2,567               --
  Bank charges                                         2,482              296
  Repairs and maintenance                              1,389              692
  Penalties and fines                                     --              150
  Miscellaneous expense                                2,269            1,126
                                                     --------------------------
                                                     576,408          449,551

Loss from operations                                (494,692)        (444,889)

Interest Expense                                    ( 42,973)        (  6,242)
                                                     --------------------------
Loss before provision for income taxes              (537,665)        (451,481)

Provision for income taxes                          (    245)        (    350)
                                                     --------------------------

Net Loss                                           $(537,910)       $(451,481)
                                                     --------------------------
                                                     --------------------------

Basic net loss per common share                    $  (.60)           $(0.58)
                                                     --------------------------
                                                     --------------------------
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING                            900,000           782,500
                                                     --------------------------
                                                     --------------------------

                             BODYGUARD RECORDS.COM
                            STATEMENTS OF CASH FLOWS


                                                     For the Fiscal Year Ended
                                                             March 31,
                                                     2002               2001
                                                     --------------------------

CASH FLOWS PROVIDED BY (USED FOR)
OPERATING ACTIVITIES:

Net Loss                                            $(537,910)      $(451,481)

Adjustments to reconcile net loss to net
 cash used for operating activities:
   Depreciation expense                                   767              --
   Stock issued for use equipment lease                    --          40,000
   Additional capital contributed in exchange
    for officer's compensation                        150,000         150,000
   Additional capital contributed in exchange
    for professional services                          12,500              --
Changes in certain assets and liabilities:
 (Increase) decrease in:
   Inventory                                         (10,056)              --
   Accounts receivable                               (13,675)              --
   Prepaid expenses                                    4,452         (  4,452)
   Security deposit                                  (   100)              --
 Increase (decrease) in:
   Accrued interest expense                           49,215               --
   Accounts payable and accrued expenses              30,593           34,606
                                                     --------------------------
Net cash used for operating activities              (314,214)        (231,327)
                                                     --------------------------

INVESTING ACTIVITIES:
 Purchase of fixed assets                            ( 4,792)              --
                                                     --------------------------

FINANCING ACTIVITIES:
 Proceeds from the issuance of common stock               --            47,000
 Proceeds from loans payable                         315,000           185,000
                                                     --------------------------
Net Cash Provided by Financing Activities            315,000           232,000

(DECREASE) INCREASE IN CASH AND
 CASH EQUIVALENTS                                   (  4,006)              673

CASH AND CASH EQUIVALENTS:
 Beginning of year                                     6,991             6,318
                                                     --------------------------
 End of year                                        $  2,985           $ 6,991
                                                     --------------------------


                             BODYGUARD RECORDS.COM
                      STATEMENT OF STOCKHOLDERS' DEFICIENCY
                            MARCH 31, 2002 AND 2001

                                   Shares of    Shares of
                                   Preferred      Common     Common   Additional
                                 Stock Issued  Stock Issued   Stock  Paid-in cap
                                 -----------------------------------------------

Balance at March 31, 2000                  --      665,000   $  665   $ 191,435

Stock issued in exchange for cash          --      235,000      235      46,765

Additional capital contributed for
 use of equipment lease                    --           --       --      40,000

Additional capital contributed in
 exchange for officers' compensation       --           --       --     150,000

Net loss for fiscal year end
 March 31, 2001                            --           --       --          --
                                 -----------------------------------------------
Balance at March 31, 2001                  --      900,000      900     428,200

Additional capital contributed
 in exchange for officers'
 compensation                              --           --       --     150,000

Additional capital contributed
 in exchange for professional
 services                                  --           --       --      12,500
Net loss for fiscal year end
 March 31, 2001                            --           --       --          --
                                 -----------------------------------------------
Balance at March 31, 2002                  --      900,000    $ 900    $ 590,700
                                 -----------------------------------------------
                                 -----------------------------------------------

                             BODYGUARD RECORDS.COM
                      STATEMENT OF STOCKHOLDERS' DEFICIENCY
                            MARCH 31, 2002 AND 2001
                                   CONTINUED


                                                                 Total
                                          Accumulated          Stockholders'
                                             Deficit            Deficiency
                                 -----------------------------------------------

Balance at March 31, 2000                 $ (187,282)           $   4,818

Stock issued in exchange for cash                 --               47,000

Additional capital contributed for
 use of equipment lease                           --               40,000

Additional capital contributed in
 exchange for officers' compensation              --              150,000

Net loss for fiscal year end
 March 31, 2001                             (451,481)            (451,481)
                                 -----------------------------------------------
Balance at March 31, 2001                   (638,763)            (209,663)

Additional capital contributed
 in exchange for officers'
 compensation                                     --              150,000

Additional capital contributed
 in exchange for professional
 services                                         --               12,500

Net loss for fiscal year end
 March 31, 2001                              (537,910)           (537,910)
                                 -----------------------------------------------
Balance at March 31, 2002                  $(1,176,673)         $(585,073)
                                 -----------------------------------------------
                                 -----------------------------------------------


                          BODYGUARD RECORDS.COM, INC.
                         NOTES TO FINANCIAL STATEMENTS
                            MARCH 31, 2002 AND 2001

--------------------------------------------------------------------------------
NOTE 1 - ORGANIZATION:
--------------------------------------------------------------------------------


Bodyguard  Records.com,  Inc. (the  "Company") was  incorporated in the State of
Delaware on November 12,  1999.  The Company is involved in the record and music
industry that utilizes the Internet and other emerging  technologies  to promote
and  market,  manufacture  and  distribute  signed  recording  artists and their
compact discs. In addition,  the Company intends to utilize technology that will
allow a live video link to recording sessions at the Company's music studio. The
Company also intends to produce and  distribute  prerecorded  music  products of
their  recording  artists  and use their  website to  recruit  and  develop  new
recording artists.


--------------------------------------------------------------------------------
NOTE 2  -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
--------------------------------------------------------------------------------


Basis of Accounting:

The Company's policy is to prepare its financial statements on the accrual basis
of accounting.

Use of Estimates:

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

Advertising:

Advertising costs are expensed as incurred.

Licensor Accounting:

The Company accounts for revenues,  artist compensation costs and cost of record
masters in accordance  with the Financial  Accounting  Standards Board Statement
No. 50 (SFAS 50),  Financial  Reporting in the Record and Music Industry.  Under
SFAS 50, the Company expenses license expenses,  artist  compensation  costs and
the cost of record  masters  unless there is reasonable  certainty of its useful
life.

Revenue Recognition:
The Company recognizes revenue at the time the recordings are shipped from the
distributor who distributes such recordings on behalf of the Company for a fee.

Cash and Cash Equivalents:

Cash and cash equivalents  consist  primarily of cash at banks and highly liquid
investments with maturities of three months or less.

Inventories:

Inventories,  which consist  primarily of compact discs, are valued at the lower
of cost or market.

Federal Income Taxes:

The Financial  Accounting  Standards Board issued Statement No. 109, "Accounting
for Income Taxes" (SFAS 109), which provides for the recognition of deferred tax
assets, net of an applicable valuation allowance,  related to net operating loss
carryforwards and certain temporary differences.

Loss Per Share:

Basic net loss per share was computed  based on the weighted  average  number of
shares of common stock outstanding  during the years.  Diluted loss per share is
not  presented  since  general  effect  to  potential  common  shares  would  be
anti-dilutive.

Stock Option Plans:

The Company accounts for stock options in accordance with Accounting  Principles
Board Opinion No. 25 (APB 25), "Accounting for Stock Issued to Employees." Under
APB 25, the Company recognizes no compensation expense related to employee stock
options, as no options are granted at a price below fair market value.

Accounts Receivable:

The  Company  includes  a  reserve  for  future  returns,  discounts  and  other
allowances as an offset to net sales.

--------------------------------------------------------------------------------
NOTE 3  -  DEVELOPMENT STAGE COMPANY:
--------------------------------------------------------------------------------

For the period November 12, 1999 (inception)  through June 30, 2001, the Company
was a  development  stage company as defined in Financial  Accounting  Standards
Board  Statement  No.  7. As of July  1,  2001,  the  Company  began  generating
revenues. The financial statements reflect this change.

--------------------------------------------------------------------------------
NOTE 4  -  INCOME TAXES:
--------------------------------------------------------------------------------


As of March 31, 2002,  the Company has  available,  on a federal tax basis,  net
operating loss carryforwards of approximately $1,175,000 which expire at varying
amounts through 2022.

The Company's total deferred tax liabilities,  deferred tax assets and valuation
allowance consists of the following at March 31, 2002:

Total deferred tax liabilities          $        -
Total deferred tax assets                  353,000
Total valuation allowance                 (353,000)
                                        ----------

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

The tax  effects  that give  rise to the  deferred  tax  assets  consist  of net
operating losses.

--------------------------------------------------------------------------------
NOTE 5  -  NOTES PAYABLE:
--------------------------------------------------------------------------------

At March 31, 2002, notes payable are as follows:

Fourteen separate loan agreements with an individual accredited
investor, who is a related  party  (see  Note 10),  interest
rates  ranging  from 9% to 15% with principal and interest
due through September 28, 2002, ten of the fourteen loans
are currently in default and due on demand                           $ 225,000

Five separate loan agreements  with an individual  accredited
investor,  who is a related party (see Note 10),  convertible
into  common  stock at $1.00 per share,  interest at 9% with
principal  and  interest  due on the date of the initial  public
offering,  amounts currently in default and due on demand               95,000

Four separate loan agreements with two unrelated accredited
investors,  interest rates at 10% and 12% with  principal and
interest due through  September 10, 2002,  two of the four
loans are currently in default                                         160,000

Loan  agreement  with  unrelated  accredited  investor,  interest
at 12%,  principal  and interest due on the date of the initial
public  offering,  amount currently in default and  due on demand       20,000
                                                                     ---------
    Total                                                              500,000
    Less: Current maturities                                          (500,000)
                                                                     ---------

          Long-Term Portion of Notes Payable                        $       -
                                                                     =========

As stated in Note 13, on June 30,  2002,  the  Company  borrowed  an  additional
$10,000 from an  accredited  investor,  who is a related party (see Notes 10 and
13), with an interest rate of 12% with principal and interest  payable on August
20, 2002.


--------------------------------------------------------------------------------
NOTE 6  -  COMMITMENTS AND CONTINGENCIES:
--------------------------------------------------------------------------------


On  December  1,  1999,  the  Company  entered  into  two  executive  employment
agreements with the President and Chief Executive  Officer for a period of three
years.  Thereafter,  the agreement shall be renewed upon the mutual agreement of
the  executive  and  the  Company.  The  terms  of the  agreement  state  a base
compensation  of $75,000 for the first year increasing to $150,000 per year with
10% cost of living  increases for each year thereafter and includes  clauses for
vacation,  sick  leave,  insurance  coverage  and  expense  reimbursement.   The
agreements also state that bonuses and stock options will be issued once certain
performance  levels are attained.  These  agreements have been amended to forego
any  compensation  until the maximum  shares  available  for sale as part of the
initial  public  offering  have been sold (Note 12).  While the  officers of the
Company elected to forego any compensation,  officers'  compensation  expense is
reported with an offset to paid-in capital for donated services.

The Company  has four  artist  recording  agreements  with acts to  commercially
produce and release an initial record.  Each agreement has the option to release
future  records  if the  Company  desires.  The  Company  will pay the  artists'
royalties  after the  recoupment  of  expenses  paid on  behalf of the  artists,
starting at $1.50 per record sold and  increasing to $3.00 per record sold based
on where the sale takes place and volume milestones.

On February 21, 2001, the company entered into two licensing agreements covering
four existing artists. The agreements give the Company  non-exclusive rights for
a 20-year period to manufacture, advertise, sell, lease, license records as well
as use the name and  photographs  of the  artists  covered.  In  addition to the
artists'  royalties  under the  artists'  agreements,  the Company  will pay the
licensor a 10% royalty fee on the gross  income for each  record,  video tape or
DVD  manufactured  and sold featuring the artists  covered by the agreement.  As
stated  in  Note  10,  the  licensor's   President  is  a  member  of  Bodyguard
Records.com's  Board of  Directors.  At March 31,  2002 and  2001,  there was no
activity related to these agreements.

On January 8, 2001,  the  Company  entered  into a recording  agreement  with an
artist group for one  recording of ten songs over an eighteen  month period from
the time of delivery of artwork and masters.  The Company is to pay royalties of
40% of gross  income of all  retail  sales  and 50% of gross  income of all mail
order sales. At March 31, 2002 and 2001,  there was no activity  related to this
agreement.

On January  18,  2001,  the Company  entered  into a  collective  manufacturing,
warehousing,  distribution  and  financing  agreement  for the artists under the
Bodyguard Records.com label. The Company incurred an up-front administrative fee
of  $5,000  and  is  charged  for  actual  costs  and  materials   used  in  the
manufacturing,  warehousing,  and distribution process, plus a 7% chargeback fee
on all activity. The amount incurred at March 31, 2002 was $119,200.

On  February  21,  2002,  the  Company  entered  into a  non-exclusive  Internet
Licensing  Agreement  allowing the  licensee to  electronically  distribute  the
albums,  masters,  singles or any compilation of the  manufactured  intellectual
property as well as merchandise for two contracted  artists.  the licensee is to
pay  the  Company  50%  of  the  gross  revenue  less  shipping,  marketing  and
accountable  costs,  not to exceed  10%.  As of March 31,  2002,  there  were no
amounts incurred or paid under this agreement.


--------------------------------------------------------------------------------
NOTE 6  -  COMMITMENTS AND CONTINGENCIES: (Continued)
--------------------------------------------------------------------------------

On March 14, 2002, the Company  assigned a contracted  recording  artist and its
master  recording to the assignee for  $10,000,  which  represents  the expenses
incurred by the assignor on behalf of the artist.  In addition,  the assignor is
to  receive  10% and 5% of the  gross  sales  of the  first  and  second  album,
respectively.


--------------------------------------------------------------------------------
NOTE 7  -  LEASE AND SUB-LEASE AGREEMENT:
--------------------------------------------------------------------------------


At March 31, 2002 future minimum payments on the lease are as follows:


     Year
     2003                                 $3,800
                                           =====

--------------------------------------------------------------------------------
NOTE 8  -  OPERATING LEASE:
--------------------------------------------------------------------------------

On  December  8, 1999,  the  Company  entered  into a two year  operating  lease
agreement  with an entity  controlled by a majority  stockholder  for the use of
recording and studio equipment in exchange for equity.  The contract states that
the Company can use the  equipment for a maximum of  thirty-five  hours per week
with a maximum  fair lease value of  $600,000.  During the years ended March 31,
2002 and 2001, the Company incurred $-0- and $40,000 of equipment lease expense,
respectively.

--------------------------------------------------------------------------------
NOTE 9  -  GOING CONCERN:
--------------------------------------------------------------------------------

As shown in the  accompanying  financial  statements,  the Company has  suffered
losses from its inception and at March 31, 2002,  current and total  liabilities
exceeded  current and total  assets by $585,073.  In  addition,  eighteen out of
twenty-four  loan  agreements  are in default.  These factors raise  substantial
doubt about the Company's  ability to continue as a going concern.  As stated in
Note 12, the Company is seeking an infusion  of capital  from an initial  public
offering.


--------------------------------------------------------------------------------
NOTE 10  -  RELATED PARTY TRANSACTIONS:
--------------------------------------------------------------------------------

As stated in Note 8, in  December  2000,  the  Company  entered  into a two year
operating lease agreement with an entity controlled by a majority stockholder to
lease recording and studio equipment.

The Company has entered into verbal agreements with two companies  controlled by
the  executive  officers  and  majority  stockholders  of the Company to provide
services to promote and market the Company's  existing artists and the Company's
label. Amounts paid, including reimbursable expenses, to these companies for the
fiscal  years  ended  March  31,  2002  and  2001  was  $119,868  and  $117,548,
respectively.

The Company has entered into two licensing agreements covering four artists with
a  company  who's  President  is also a  member  of the  Board of  Directors  of
Bodyguard Records.com. (See Note 6)

The Company has twenty loans  outstanding  totaling  $340,000 from an individual
whose spouse and children are stockholders of the Company. (See Note 5)

The Company  utilizes the services of an individual whose spouse owns 13% of the
outstanding common stock. This individual is providing the services pro bono and
in lieu of  compensation.  The Company has recorded the value of these services,
which approximate $12,500, as additional paid-in capital.


--------------------------------------------------------------------------------
NOTE 11  -  STOCK OPTION PLAN:
--------------------------------------------------------------------------------

Under terms of the Company's incentive stock option plans,  officers,  employees
and certain  vendors may be granted  options to purchase  the  Company's  common
stock at no less  than  100% of the  market  price on the  date  the  option  is
granted.  Options generally vest once a specified performance criteria is met or
over a period of time ranging from one to three years.

At March 31, 2002 and 2001, there were no options granted or outstanding.


--------------------------------------------------------------------------------
NOTE 12  -  INITIAL PUBLIC OFFERING:
--------------------------------------------------------------------------------


On February 11, 2002, the Company's  Registration  Statement became an effective
filing with the SEC.  Pursuant  to the  Registration  Statement,  the Company is
conducting an initial public offering (the "Offering")  wherein it is seeking to
sell a minimum of 100,000 and a maximum of 400,000 shares of its common stock to
the public at $2.50 per share.  If successful,  gross proceeds from the Offering
will be a minimum of $250,000 and a maximum of $1,000,000. As of March 31, 2002,
no proceeds have been received.


--------------------------------------------------------------------------------
NOTE 13  -  SUBSEQUENT EVENTS:
--------------------------------------------------------------------------------

On June 20, 2002, the Company borrowed an additional  $10,000 from an accredited
investor  with an interest rate of 12% with  principal  and interest  payable on
August 20, 2002.

On June 18, 2002, the Company entered into a licensing  agreement with an entity
in the United Kingdom to manufacture,  advertise,  sell, lease,  license and use
the artists' names and photographs.  The Company is entitled to royalties in the
amount of 15% and 10% of the gross income of direct sales and  subleased  sales,
respectively.

In July 2002, a substantial creditor, who is also a related party (see Note 10),
has agreed to infuse monies  directly to third party  vendors to cover  ordinary
operating expenses in the amount of approximately  $20,000.  These payments will
be classified as debt on the Company's books.

--------------------------------------------------------------------------------
NOTE 14  -  OFFICERS' COMPENSATION:
--------------------------------------------------------------------------------

The two officers of the Company entered into employment  contracts  stating each
was to receive  $75,000 per annum.  The  officers  elected to forego  payment of
their salaries until  sufficient  proceeds from the initial public offering have
been  received.  The amounts have been recorded as  compensation  expense with a
corresponding  credit to paid-in capital as donated capital,  in accordance with
Topic 1B of the Staff Accounting Bulletin.