SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                   FORM 10K-SB
          Annual report pursuant to section, section 13 or 15(d) of the
                         Securities Exchange Act of 1934
    For the fiscal year ended April 30,2004. Commission file number 000-33285

                           DYNAMIC INTERNATIONAL, INC.
             (Exact Name of Registrant as Specified in its Charter)

<TABLE>
<S>                                                                   <C>
                     Nevada                                                            11-3563216
--------------------------------------------------------------         ---------------------------------------
(State or other jurisdiction of incorporation or organization)         (I.R.S. Employer Identification Number)

          58 Second Avenue, Brooklyn, New York                                           11215
---------------------------------------------------------                          -----------------
        (Address of Principal Executive Offices)                                      (Zip Code)

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         Registrant's telephone number, including Area Code:    (718) 369-4160
                                                              -----------------

        Securities to be registered pursuant to Section 12(b) of the Act:
                                      None

        Securities to be registered pursuant to Section 12(g) of the Act:

                    Common Stock (par value $.001 per share)
                   ------------------------------------------
                                 Title of Class


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

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

The aggregate market value of voting and non-voting common equity held by
non-affiliates of the Issuer: Indeterminate - No existing market

The number of shares outstanding of Issuer's Common Stock as of July 29,2004:
4,418,258

Transitional Small Business Disclosure Format: Yes [ ] No [X]


Revenues for the most recent fiscal year: $6,922,000




                                     Page 1

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                                Table of Contents
Part I

Item 1.  Description of Business                                         3

Item 2.  Properties                                                      7

Item 3.  Legal Proceedings                                               7

Item 4.  Submission of Matters to a Vote of Security Holders             7

Part II
Item 5.  Market Price of Company's Common Equity and
         Related Stockholder Matters                                     7

Item 6.  Management's Discussion and Analysis of Financial
         Condition and results of Operations                             8

Item 7.  Financial Statements                                           13


Item 8.  Changes in and Disagreements with Accountants on
         Accounting and Financial Disclosure                            13

Item 8A. Controls And Procedures                                        13

Part III

Item 9.  Directors and Executive officers of the Company                14

Item 10. Executive Compensation                                         15

Item 11. Security ownership of certain beneficial owners and
         Management                                                     16

Item 12. Certain Relationships and Related Transactions                 17

Part IV

Item 13. Exhibits on Form 10K                                           18

Item 14. Principal Accountant Fees And Services                         18

Signatures                                                              19



                                     Page 2
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                                     PART I
ITEM 1. DESCRIPTION OF BUSINESS

Statements contained herein, which are not historical facts, are forward-looking
statements. Forward-looking statements involve a number of risks and
uncertainties including, but not limited to, general economic conditions, the
Company's ability to complete development and then market its products and
competitive factors and other risk factors detailed herein.

BACKGROUND OF REGISTRANT

Dynamic International, Inc. (the "Company") was formed on August 31,2000 as a
wholly owned company of Dynamic International Ltd. ("Ltd."). Pursuant to an
Equity Transfer and Reorganization Agreement dated August 10,2000, (The
"Agreement") by and among Ltd., certain of its shareholders, Emergent Management
Company, LLC ("Emergent"), and several holders of membership interests in
Emergent Ventures, LLC (an affiliate of Emergent) Ltd. transferred all of its
assets to the Company. In addition, the Company assumed all of the liabilities
of Ltd. (other than outstanding bank debt in the amount of $250,000).
Immediately following such transfer of assets and the assumption of liabilities,
Ltd. transferred to its shareholders, on a pro-rata basis, all of the issued and
outstanding shares of common stock of the Company (4,418,258 shares).

BUSINESS OF REGISTRANT

The Company, a Nevada corporation, is engaged in the design and marketing of
sports bags and luggage, which are marketed primarily under the licensed name
JEEP(TM) and under its own name, Polaris Expedition(TM). The Company's objective
is to become a designer and marketer of goods that are associated with a
free-spirited lifestyle and leisure time.

PRODUCTS

SPORTS BAGS/LUGGAGE - The Company's line of sports bags/luggage consists
primarily of duffel bags, weekend bags, garment bags, suitcases, pilot cases and
flight attendant wheeled cases. Some of the models are equipped with wheels
and/or retractable handles.

DESIGN AND DEVELOPMENT

The Company has been granted a number of design patents with respect to certain
of its products. See "Intellectual Property--License Agreements". The Company
employs a designer on a full-time basis for the design of its sports
bags/luggage products. During the most recent fiscal year the Company spent
approximately $ 129,000 on design activities, including fees to designers and
patent attorneys. The Company may, from time to time, utilize the services of
consultants for product and package design.

The Company's products are manufactured in China which in the most recent fiscal
year accounted for 100% of the Company's products. Orders for sports
bags/luggage require a period of 90 to 120 days before they are shipped. The
Company ordinarily has its products manufactured based on purchase orders and it
has no long-term relationships with any of its manufacturers. The Company
believes that, if necessary, it will be able to obtain its products from firms
located in other countries at little if any additional expense. As a
consequence, the Company believes that an interruption in deliveries by a
manufacturer located in a particular country will not have a material adverse


                                     Page 3
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impact on the business of the Company. Nevertheless, because of political
instability in a number of the supply countries, occasional import quotas and
other restrictions on trade or otherwise, there can be no assurance that the
Company will at all times have access to a sufficient supply of merchandise


SALES AND MARKETING

The Company sells its products on a wholesale basis only. The Company's products
are sold to discount stores, mass merchants, department stores, luggage
specialty stores and sporting goods stores. For the fiscal year ended April 30,
2004, JC Penney, Sears Roebuck & Co. Kohl's Department Stores and BJ'S Wholesale
Club accounted for 30%, 20%, 14% and 12%, respectively, of the Company's
revenue. No other customer accounted for more than 10% of the Company's
revenues. For the fiscal year ended April 30, 2004, sales of the Company's
sports bags/luggage products accounted for 100% of the Company's revenues.

The Company sells its products primarily through independent sales agents on a
commission-only basis. The Company currently engages 4 sales agents either on an
individual basis or through independent sales organizations. The Company has no
long-term arrangements with any of its agents. The Company usually pays
commissions ranging from .5% to 5% of the net sales price of its products.
Although the Company believes that its sales agents sell products exclusively on
behalf of the Company, there are no agreements that prohibit them from selling
competing products.

In addition, on a small scale, the Company markets existing products to
retailers for resale under their own private labels. Currently, the Company
delivers to Kohl's Department Stores. Although the scope of this marketing
effort is currently limited, the Company intends to try to expand the number of
private label transactions. No assurance can be given that its efforts in this
area will be successful.


COMPETITION

The Company's sports bags/luggage products compete with products designed by a
number of the largest companies in the industry, including Samsonite, Sky Way,
American Tourister, Ricardo and High Sierra. The Company believes that because
of its concentration on the upscale lifestyle and more specialized leisure
market that are associated with the trademark JEEP(TM), it will be able to
continue to grow its sports bags/luggage business. The Company's larger
competitors have access to greater financial resources. Accordingly, there can
be no assurance that the Company will be able to effectively compete with these
companies as well as with other smaller entities.


                                     Page 4
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INTELLECTUAL PROPERTY--LICENSE AGREEMENTS

The Company owns the trademark Polaris Expedition(TM),U.S. Trademark
Registration Number 2,417,987.This trademark is used on a collection of the
Company's backpacks, duffel bags and upright Pullmans.

The Company owns the U.S. Design Patent for a Wheeled Backpack. U.S. Design
Patent Number US D448, 161 S. This patent is for the ornamental design of a
wheeled backpack.


LICENSE AGREEMENTS - The Company sells a number of its products under licensed
names. The Company has entered into licensee agreements, which provide for the
use of various trade names, as follows:

JEEP AND PT CRUISER - Under an agreement dated January 8, 1993, as amended by
letter amendment dated May 13,2004, between the Company and the Daimler Chrysler
Corporation (as so amended, the "Jeep Agreement"), the Company was granted the
exclusive license to use the names JEEP, WRANGLER and RENEGADE in connection
with the manufacture, sale and distribution of sports bags/luggage products. The
current expiration date of the Jeep Agreement is December 31, 2010. Under the
agreement, the Company must pay the greater of 6% of net Jeep sales or minimum
royalties of $412,000, $425,000, $450,000, $450,000, $458,000, $483,000 and
$333,000 for the fiscal years ending in 2005 through 2011. In addition, the
Company must pay 1% of net Jeep sales as an advertising fee. Under an amendment
to the Jeep agreement dated September 17,2003,the Company was granted the
non-exclusive license to use the name PT Cruiser in connection with the
manufacture, sale and distribution of travel gear limited to backpacks, duffel
bags, luggage and audio cases. Under the agreement, the Company must pay the of
6% of net PT Cruiser sales for the period June 1, 2003 thru December 31, 2004
and the calendar year 2005. In addition, the Company must pay 1% of net PT
Cruiser sales as an advertising fee.

ADOLFO- Under an agreement dated September 1,2000, between the Company and 3L
Associates, the Company was granted the exclusive license to use the Adolfo name
in connection with the manufacture, sale and distribution of sports bags/luggage
products. The Adolfo agreement, which was renewable until March 2007, expired on
March 31, 2003. Under the agreement, the company must pay the greater of 6% of
net Adolfo sales or minimum payments of $25,000 for each annual period until
March 2003. The Company notified the licensor that the Company does not intend
to renew the agreement. A dispute has arisen, however, because the licensor
believes the Company's notification of termination was inadequate. SEE PART I,
ITEM 3. LEGAL PROCEEDINGS


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MANAGEMENT AGREEMENT WITH ACHIM IMPORTING CO., INC.

Pursuant to a Warehousing and Service Agreement dated as of September 21,2000
(the "Warehousing Agreement") between the Company and Achim Importing Company,
Inc. ("Achim"), Achim performs certain administrative services on behalf of the
Company. Under the Warehousing Agreement, Achim assists, among other things, in
the maintenance of financial and accounting books and records, in the
preparation of monthly financial accounts receivable aging schedules and other
reports and in the performance of credit checks on the Company's customers.

In consideration for these services, Achim receives an annual fee calculated as
a percentage of the Company's invoiced sales originating at the warehouse
ranging from 4% of invoiced sales under $30 million to 3% for sales of $60
million or more. For sales not originating at the warehouse, Achim receives a
service fee in the amount of 1.5% of the Company's invoiced sales to customers
and accounts located in the United States if payment is made by letter of credit
and 1% if such customers and accounts are located outside the United States,
irrespective of manner of payment.

In addition, under the Warehousing Agreement, Achim provides warehousing
services consisting of receiving, shipping and storing of the Company's
merchandise. The Company pays Achim a monthly fee of 3% of its invoiced sales
originating at the warehouse in connection with these warehousing services
performed by Achim under the Warehousing Agreement. As part of this agreement
the Company applies an offset for certain shared expenses.

The Warehousing Agreement has a term of two years and is automatically renewable
for additional one-year periods unless written notice of termination is given at
least six months prior to the commencement of a renewal period. During the
fiscal year ended April 30, 2004, the Company charged operations approximately
$322,000 in fees.

Pursuant to a Security Agreement dated as of January 2,2001 between the Company
and Achim, Achim has perfected its security interest in the accounts,
collateral, documents, general intangibles, instruments and inventory of the
Company. This security agreement is intended to secure amounts due to Achim for
purchases of inventory Achim has made for the Company, for which Achim has
charged the Company without markup, and for advances of working capital to the
Company. As of April 30,2004 the balance due to Achim was $1,129,000.
In addition, as an accommodation, during 2004 sales made to certain customers
are billed by and through the related company. At April 30, 2004 $72,767 is due
from the related company for such sales.

Achim is wholly owned by Marton B. Grossman, the Company's Chairman and
President.

EMPLOYEES

As of July 15,2004, the Company employed 7 persons, of whom three were executive
officers, two were engaged in sales and two were involved in
operations-warehousing and shipping. None of the Company's employees is
represented by a union and no work stoppages have occurred.



                                     Page 6
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ITEM 2.   PROPERTIES

The Company occupies 4,500 square feet of office space, located at 58 Second
Avenue, Brooklyn, New York. The property is leased by Achim from C&F Second
Avenue. Since Achim is the lessee, Achim makes the property available to the
Company on an at-will basis. In addition, the Company occupies space in a
warehouse located at 1600 Livingston Avenue, North Brunswick, New Jersey. The
Company occupies space in this warehouse on an as needed basis and at will
basis. The property is leased by Achim from 1600 Rt.1, LLC. See PART I ITEM 1.
DESCRIPTION OF BUSINESS "Management Agreement with Achim Importing Co., Inc."
and PART III ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

ITEM 3.  LEGAL PROCEEDINGS

The Company has answered a complaint filed by 3L Associates on July 31, 2003.
The Company entered into a license agreement with 3L Associates in September of
2000, under which agreement the Company was given the license to use the
trademark Adolfo in connection with luggage and accessories. The complaint
alleges that the Company did not pay minimum royalties of $25,000 for the period
April 1, 2002 to March 31, 2003. The complaint also alleges that the Company did
not give the required notice to 3L Associates that the Company did not wish to
extend the term of the license agreement. In the complaint, 3L Associates
demands judgment against the Company in the amount of $300,000, together with
its expenses and reasonable attorney's fees, legal interest and costs, and such
other and further relief as shall seem just and proper to the court. The Company
is vigorously defending against the suit.


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

         Not applicable.





                                     PART II

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

The Company's common shares do not trade publicly. As of July 29, 2004,the
Company had 4,418,258 shares of Common Stock outstanding held by 1,348
shareholders of record, all of which shares may be sold pursuant to Rule 144 of
the Securities Act of 1933, as amended. The Company does not have any options or
warrants outstanding.

The Company has not paid a cash dividend on its Common Stock. The Company
intends to retain all earnings for the foreseeable future for use in the
operation and expansion of its business and, accordingly, the Company does not
contemplate paying any cash dividends on its Common Stock in the near future.

                                     Page 7
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ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

Statements contained herein, which are not historical facts, are forward-looking
statements. Forward-looking statements involve a number of risks and
uncertainties including, but not limited to, general economic conditions, the
Company's ability to complete development and then market its products and
competitive factors and other risk factors detailed herein.

Dynamic International, Inc. (the "Company") was formed on August 31,2000 as a
wholly owned company of Dynamic International Ltd. Pursuant to an Equity
Transfer and Reorganization Agreement dated August 10,2000. (The "Agreement") by
and among Ltd., certain of its shareholders, Emergent Management Company, LLC
("Emergent"), and several holders of membership interests in Emergent Ventures,
LLC (an affiliate of Emergent), Ltd. transferred all of its assets to the
Company. In addition the Company assumed all of the liabilities of Ltd. (other
than outstanding bank debt in the amount of $250,000).

GENERAL
The following discussion should be read in conjunction with the Financial
Statements and related notes thereto of the Company included elsewhere herein.

RESULTS OF OPERATIONS FOR THE FISCAL YEAR ENDED APRIL 30, 2004 COMPARED TO THE
FISCAL YEAR ENDED APRIL 30, 2003.

The following table sets forth the result of operations for the periods
discussed below.

                                 Fiscal Year     % of       Fiscal Year    % of
                                   Ended          Net         Ended         Net
                                April 30, 2004   Sales    April 30, 2003   Sales
Gross Sales                       $7,440,000                $8,343,000
 Allowances                         (518,000)                 (902,000)
                                ------------               -----------
Net Sales                         $6,922,000     100.00     $7,441,000    100.00
Cost of Goods
Sold                               4,174,000      60.30     $5,198,000     69.86
                                ------------               -----------

Gross Margin                       2,748,000      39.70      2,243,000     30.14

Operating Expenses                 1,680,000      24.30      1,774,000     23.84
Interest                              10,000        .14         15,000       .20
Interest- related party               64,000        .89        136,000      1.83
                                ------------               -----------
                                   1,754,000      25.33      1,925,000     25.87

Pretax Income (Loss)                $994,000      14.37       $318,000      4.27

Sales for the fiscal year ended April 30, 2004,decreased by $519,000 or 7.0% to
$6,922,000 from $7,441,000 for the fiscal year ended April 30, 2003. During the
fiscal year ended April 30, 2004, sales to Sears Roebuck BJ's Wholesale Club,
Mervyn's, Interone Marketing, Value City, Richman Gordman and The Bonton
decreased by approximately $534,000, $285,000, $196,000, $123,000, $108,000,
$97,000 and $89,000, respectively. These decreases were partially offset by



                                     Page 8
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increased sales to JC Penney's, Ross Stores and TJ Maxx of approximately
$488,000, $240,000 and $147,000, respectively. Allowances granted to customers
were 7.5% of net sales for the fiscal year ended April 30,2004 compared to 12.1%
for the fiscal year ended April 30,2003. This decrease was due primarily to
allowances given to JC Penney and Mervyn's for the introduction of new products,
for the fiscal year ended April 30,2003 of $100,000 and $30,000, respectively.
In addition the Company provided price support to Mervyn's and Kohl's Department
Stores of $37,000 and $75,000,respectively, during the fiscal year ended April
30,2003.

The Company's gross profit of $2,748,000 for the fiscal year ended April 30,
2004 was $505,000 higher than the gross profit of $2,243,000 for the fiscal year
ended April 30,2003. The gross profit, as a percentage of sales, improved from
30.14% in fiscal 2003 to 39.70% in 2004. These increases are the result of
improved pricing on merchandise purchased from The Peoples Republic of China,
reductions in sales allowances and other cost containment measures. In addition,
sales for the fiscal year ended April 30,2003 included sales of discontinued and
written down inventory of approximately $746,000 which were sold at
approximately their carrying value.

Operating expenses, exclusive of interest expense, of $1,680,000 for the fiscal
year ended April 30, 2004 were $94,000 less than operating expenses of
$1,774,000 for the fiscal year ended April 30, 2003. This decrease is
represented approximately by changes in the following expenses:

                                       Increase
                                      (Decrease)

Royalty Expense                        ($52,000)
Shipping Salaries                       $20,000
Shipping Fees                          ($83,000)
Freight Out                             $18,000
Salesman Salaries                      ($18,000)
Travel Expenses                         ($8,000)
Show Expenses                          ($13,000)
Officer Salaries                        $28,000
Insurance                               $10,000
Accounting Fees                         $ 6,000

Royalty expenses decreased by $52,000 due primarily to the decrease in sales.
Shipping salaries increased by $20,000 due to an increase in compensation.
Shipping fees decreased by $83,000 due to the decrease in sales and an increase
in direct shipments to customers during the fiscal year ended April
30,2004.Direct shipments incur shipping fees at a lower rate than domestic
warehouse sales. Freight out increased by $18,000 due primarily to an increase
in shipments of merchandise to the Florida distribution center for BJ's
Wholesale Club. Salesman salaries and travel expenses decreased by $18,000 and
$8,000, respectively, due primarily to the elimination of a sales position. Show
expenses decreased by $13,000 due to cost containment measures. Officer salaries
increased by $28,000 due to an increase in compensation. Insurance expense
increased by $10,000 due primarily to increased premiums. Accounting fees
increased by $6,000.

Interest expense for the fiscal year ended April 30, 2004 decreased by $5,000
from the fiscal year ended April 30, 2003. This decrease is due primarily to
reduced interest charges by JPMorgan Chase Bank for purchases of inventory made
via letter of credit. Purchases of inventory decreased by approximately
$1,100,000 in the fiscal year ended April 30,2004.

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Interest expense- related party for the fiscal year ended April 30,2004
decreased by $72,000 to $64,000 from $136,000 for the fiscal year ended April
30,2003. This decrease is due to and the reduction of amount due to Achim
Importing Company, Inc. ("Achim").

The Company's pretax income of $994,000 for the fiscal year ended April 30, 2004
represents a $676,000 change from pretax income of $318,000 for the fiscal year
ended April 30, 2003.

The Company recorded a deferred tax asset at April 30,2004 of $540,000. The
asset is the result of a reduction of the valuation allowance on net operating
loss carry forwards.

Management has projected a business plan which it believes is realistic, and
which projects revenues to decrease by approximately $197,000 and gross margin
to decrease by approximately 6% from the fiscal year ended April 30,2004. This
will result in a decrease in net income. There will also be a continued need for
financing capabilities from Achim. No assurances can be given that any of these
anticipated results will actually be achieved.

RESULTS OF OPERATIONS FOR THE FISCAL YEAR ENDED APRIL 30, 2003 COMPARED TO THE
FISCAL YEAR ENDED APRIL 30, 2002.

The following table sets forth the result of operations for the periods
discussed below.
                              Fiscal Year    % of     Fiscal Year       % of
                                 Ended        Net        Ended          Net
                             April 30, 2003  Sales   April 30, 2002    Sales

Gross Sales                    $8,343,000              $8,334,000
 Allowances                      (902,000)               (733,000)
                             ------------             -----------
Net Sales                      $7,441,000    100.00    $7,601,000     100.00
Cost of Goods
Sold                            5,198,000     69.86    $5,872,000      77.25
                             ------------             -----------

Gross Margin                    2,243,000     30.14     1,729,000      22.74


Operating Expenses              1,774,000     23.84     2,194,000      28.86
Interest                           15,000       .20        16,000        .21
Interest- related party           136,000      1.83       215,000       2.83
                             ------------             -----------
                                1,925,000     25.87     2,425,000      31.90

Pretax Income (Loss)             $318,000      4.27     $(696,000)     (9.16)


                                    Page 10
<PAGE>

Sales for the fiscal year ended April 30, 2003,decreased by $160,000 or 2.1% to
$7,441,000 from $7,601,000 for the fiscal year ended April 30, 2002. During the
fiscal year ended April 30, 2003, sales to Kohl's Department Stores, Mervyn's,
Meijer, Inc., and Sears Roebuck decreased by approximately $562,000, $474,000,
$392,000 and $123,000, respectively. These decreases were partially offset by
increased sales to JC Penney's of approximately $1,453,000. Allowances granted
to customers were 12.1% of net sales for the fiscal year ended April 30,2003
compared to 9.6% for the fiscal year ended April 30,2002. This increase was due
primarily to allowances given to JC Penney and Mervyn's for the introduction of
new products of $100,000 and $30,000, respectively.

The Company's gross profit of $2,243,000 for the fiscal year ended April 30,
2003 was $514,000 higher than the gross profit of $1,729,000 for the fiscal year
ended April 30,2002. The gross profit, as a percentage of sales, improved from
22.74% in fiscal 2002 to 30.14% in 2003. These increases are the result of cost
containment measures and improved pricing for merchandise purchased in the
Peoples Republic of China.

Operating expenses, exclusive of interest expense, of $1,774,000 for the fiscal
year ended April 30, 2003 were $420,000 less than operating expenses of
$2,194,000 for the fiscal year ended April 30, 2002. This decrease is
represented approximately by changes in the following expenses:

                                       Increase
                                      (Decrease)

Royalty Expense                        ($308,000)
Shipping Fees                            $24,000
Salesman Salaries                      ($130,000)
Travel Expenses                         ($31,000)
Show Expenses                            $33,000
Insurance                               ($14,000)
Other Corporate Expenses                  $6,000

Royalty expenses decreased by $308,000 due primarily to the accrual of the
balance of minimum royalties due to Connelly Synergy Systems LLC, during the
fiscal year ended April 30,2002. Shipping fees increased by $24,000 due to a
decrease in direct shipments to customers during the fiscal year ended April
30,2003.Direct shipments incur shipping fees at a lower rate than domestic
warehouse sales. Salesman salaries and travel expenses decreased by $130,000 and
$31,000, respectively, due primarily to the elimination of a sales position.
Show Expenses increased by $ 33,000 because the company attended a luggage show
in March of 2003 that it had not attended in the prior fiscal year. Insurance
expense decreased by $14,000 due to lower insurance premiums. Other corporate
expenses increased by $6,000 including an increase in legal fees which was
offset by a decrease in telephone expenses.

Interest expense for the fiscal year ended April 30, 2003 decreased by $1,000
from the fiscal year ended April 30, 2002.

Interest expense- related party for the fiscal year ended April 30,2003
decreased by $79,000 to $136,000 from $215,000 for the fiscal year ended April
30,2002. This decrease is due to reduced interest rates and the reduction of
amount due to Achim Importing Company, Inc. ("Achim").


                                    Page 11
<PAGE>

The Company's pretax income of $318,000 for the fiscal year ended April 30, 2003
represents a $1,014,000 change from a pretax loss of $696,000 for the fiscal
year ended April 30, 2002.

LIQUIDITY AND CAPITAL RESOURCES

MANAGEMENT PLAN OF OPERATIONS

Management has projected a business plan which it believes is realistic, and
which projects revenues to decrease by approximately $197,000 and gross margin
to decrease by approximately 6% from the fiscal year ended April 30,2004. This
will result in a decrease in net income and the need for continued financial
support from Achim. Achim has purchased inventory for the Company and has
charged the Company for the invoiced amount without markup. Pursuant to an
unwritten understanding, Achim arranges for the issuance, by its financial
lender, of letters of credit in favor of the Company's overseas suppliers,
thereby enabling the Company to finance the purchases of its inventory. Achim
has also, from time to time, advanced working capital to the Company. As of
April 30,2004 the balance due to Achim was $1,129,000, a reduction of
approximately $1,700,000 since April 30,2003. Although, there can be no
assurance that the balance can be reduced in the future, the Company feels that
it will be able to achieve its operating needs through its agreement with
Achim. Achim has not entered into any agreements, formal or informal, to fund
the Company's operations for the next twelve months. However, no assurances can
be given that any of these anticipated results will actually be achieved.

The Company's business was adversely affected by events that began with the
terrorist attack in the United States on September 11, 2001 that had a negative
impact on travel. Consequently, the Company believes that consumer demand for
luggage has been reduced. However, management cannot predict the extent or the
duration of the impact of the above.


FISCAL YEAR ENDED APRIL 30, 2004

OPERATING ACTIVITIES
Cash provided by operating activities for the year ended April 30,2004 amounted
to $1,743,000 compared to $608,000 for the year ended April 30,2003.


FINANCING ACTIVITIES
Cash of $1,772,000 was used in investing activities in the year ended April
30,2004 compared to $589,000 in the year ended April 30,2003. This was the
result of the Company reducing the amount due to Achim. The Company records
interest on the unpaid balance due to Achim at the JPMorgan Chase prime rate
plus 1%. The amount of interest accrued for the fiscal year ended April 30, 2004
was $64,000.


FISCAL YEAR ENDED APRIL 30, 2003

OPERATING ACTIVITIES
Cash provided by operating activities for the year ended April 30,2003 amounted
to $608,000 compared to $1,379,000 for the year ended April 30,2002.


                                    Page 12
<PAGE>

INVESTING ACTIVITIES
Cash of $21,285 was used to purchase an automobile during the year ended April
30,2003. There was no investing activities during the year ended April 30,2002.

FINANCING ACTIVITIES
Cash of $589,000 was used in investing activities in the year ended April
30,2003 compared to $1,399,000 in the year ended April 30,2002. This was the
result of the Company reducing the amount due to Achim. The Company records
interest on the unpaid balance due to Achim at the JPMorgan Chase prime rate
plus 1%. The amount of interest accrued for the fiscal year ended April 30, 2003
was $136,000.



SEASONALITY AND INFLATION

The Company's business is highly seasonal with higher sales typically in the
second and third quarter of the fiscal year as a result of shipments of sports
bags/luggage related to the holiday season.

Management does not believe that the effects of inflation will have a material
impact on the Company, nor is it aware of changes in prices of material or other
operating costs or in the selling price of its products and services that will
materially affect the Company's profits.

ITEM 7.  FINANCIAL STATEMENTS

The financial statements are included herein immediately before the signature
page.


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

      None.



ITEM 8A. CONTROLS AND PROCEDURES

The Company maintains disclosure controls and procedures that are designed to
ensure that information required to be disclosed in the Company's filings under
the Securities Exchange Act of 1934 is recorded, processed, summarized and
reported within the periods specified in the rules and forms of the Securities
and Exchange Commission. Such information is accumulated and communicated to the
Company's management, including its Chief Executive Officer and Chief Financial
Officer, as appropriate, to allow timely decisions regarding required
disclosure. The Company's management, including the Chief Executive Officer and
the Chief Financial Officer, recognizes that any set of controls and procedures,
no matter how well designed and operated, can provide only reasonable assurance
of achieving the desired control objectives.

Within 90 days prior to the filing date of this annual report on Form 10KSB, the
Company has carried out an evaluation, under the supervision and with the
participation of the Company's management, including the Company's Chief
Executive Officer and the Company's Chief Financial Officer, of the



                                    Page 13
<PAGE>

effectiveness of the design and operation of the Company's disclosure controls
and procedures. Based on such evaluation, the Company's Chief Executive Officer
and Chief Financial Officer concluded that the Company's disclosure controls and
procedures are effective.

There were no significant changes in the Company's internal controls or in other
factors which could significantly affect the controls subsequent to the date of
their evaluation.


                                    PART III

ITEM 9.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

OFFICERS AND DIRECTORS

The officers and directors of the Company are as follows:

    Name                                Age         Position

    Marton B. Grossman         73       Chairman and President
    Isaac Grossman             42       Vice Chairman, Treasurer and Secretary
    William P. Dolan           51       Vice President--Finance
    Thomas Cahill              64       Vice President--Sales


MARTON B. GROSSMAN has been the Chairman and Chief Executive Officer of the
Company since August 2000. For the past 35 years, he has been President of
Achim, a privately held company engaged in the import and export of window
coverings and accessories. In addition, he is President of MG Holding Corp., a
privately held financial holding company. Mr. Grossman is the father of Isaac
Grossman, the Company's Vice Chairman, Treasurer and Secretary. Mr. Grossman
spends approximately 20% of his time working for the Company.


ISAAC GROSSMAN has been the Company's Vice Chairman, Treasurer and Secretary
since August 2000, and Vice President of Achim since 1989. He is the son of
Marton B. Grossman, the Company's Chairman and President. Mr. Grossman spends
approximately 20% of his time working for the Company.

WILLIAM P. DOLAN has been the Company's Vice President-Finance since August
2000. Mr. Dolan graduated from the William Paterson College of New Jersey and is
a Certified Public Accountant. Prior thereto, Mr. Dolan held the same position
in the predecessor company since 1987.


THOMAS CAHILL has been a Vice President--Sales at the Company since September 1,
2002. Prior thereto, Mr. Cahill was the Company's Sales Manager since November
2000.


                                    Page 14
<PAGE>

BOARD OF DIRECTORS

Each director is elected at the Company's annual meeting of stockholders and
holds office until the next annual meeting of stockholders, or until his
successor is elected and qualified. At present, the Company's bylaws require no
fewer than one director. Currently, there are two directors of the Company. The
bylaws permit the Board of Directors to fill any vacancy and the new director
may serve until the next annual meeting of stockholders or until his successor
is elected and qualified. Officers are elected by the Board of Directors and
their terms of office are, except to the extent governed by employment
contracts, at the discretion of the Board.

AUDIT COMMITTEE
The Company has not established an audit committee at this time.

CODE OF ETHICS
The Company has not adopted a code of ethics that would apply to its employees,
directors, including the Company's principal executive officer, principal
financial officer, and persons performing similar functions.



ITEM 10. EXECUTIVE COMPENSATION

The following table sets forth the compensation paid or accrued by the Company
during the three fiscal years ended April 30, 2002 (I) to its Chief Executive
Officer, (ii) its other two Executive Officers and (iii) one additional
non-Executive Officers whose cash compensation exceeded $100,000 per year in any
such year:

SUMMARY COMPENSATION TABLE (1) (2)

                          Annual Compensation
Name/Principal            Year                       All Other
Position                  Ended    Salary    Bonus   Compensation (3)

Marton B. Grossman        2004        $0               $31,200
President & Chairman      2003        $0               $31,200
                          2002        $0               $31,200

Isaac Grossman            2004        $0               $32,240
Director, Treasurer       2003        $0               $32,240
                          2002        $0               $32,240

William P. Dolan          2004  $139,439                    $0
Vice- President-Finance   2003  $111,302                    $0
                          2002  $110,825                    $0

Thomas Cahill             2004  $118,423                    $0
Vice President            2003  $104,162                    $0
                          2002  $99,615                     $0

                                    Page 15
<PAGE>

(1) The above compensation does not include the use of an automobile and other
personal benefits, the total value of which does not exceed as to any named
officer or director or group of executive officers the lesser of $50,000 or 10%
of such person's or persons' cash compensation.

(2) Pursuant to the regulations promulgated by the Securities and Exchange
Commission, the table omits columns reserved for types of compensation not
applicable to the Company.

(3) Consists of estimated portion of the fees payable to Achim under the
Warehousing Agreement attributable to Marton B. Grossman and Isaac Grossman's
activities performed on behalf of the Company. Marton Grossman is the sole
shareholder, and Isaac Grossman is an employee of Achim See Part III Item 13
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

None of the individuals listed in the table above received any long-term
incentive plan awards during the fiscal year


ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth, as of July 15,2004, information regarding the
beneficial ownership of the Company's Common Stock based upon the most recent
information available to the Company for (i) each person known by the Company to
own beneficially more than five (5%) percent of the Company's outstanding Common
Stock, (ii) each of the Company's officers and directors, and (iii) all of the
officers and directors of the Company as a group. Each stockholder's address is
c/o the Company, 58 Second Avenue, Brooklyn, New York 11215, unless otherwise
indicated.

                                Shares Owned Beneficially
                                     and of Record


Name and Address                No. of Shares                % of Total
------------------------        -------------                ----------

Marton B. Grossman (1)              2,842,977                    64.4

Isaac Grossman                             0                        *

William P. Dolan                          123                       *

All Officers and Directors
  As a group (4 persons)            2,843,100                    64.4

* Less than 1%


(1) Consists of 2,516,614 shares registered in the name of Marton B. Grossman
and 326,363 shares held by a charitable family foundation (the " Foundation").
Mr. Grossman and his wife are the directors of the Foundation. Marton and Sheila
Grossman disclaim beneficial ownership in the shares held by the Foundation.


                                    Page 16
<PAGE>

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Pursuant to a Warehousing Agreement, Achim performs certain administrative
services on behalf of the Company. Under the Warehousing Agreement, Achim
assists, among other things, in the maintenance of financial and accounting
books and records, in the preparation of monthly financial accounts receivable
aging schedules and other reports and credit checks on the Company's customers.

In consideration of these services, Achim receives an annual fee, payable
monthly, calculated as a percentage of the Company's invoiced sales originating
at the warehouse ranging from 4% of invoiced sales under $30,000,000 to 3% for
sales of $60,000,000 or more. For sales not originating at the warehouse, Achim
receives a service fee in the amount of 1.5% of the Company's invoiced sales to
customers and account located in the United States if payment is made by letter
of credit and 1% if such customers and accounts are located outside the United
States, irrespective of manner of payment.

In addition, under the Warehousing Agreement, Achim provides warehousing
services consisting of receiving, shipping and storing of the Company's
merchandise. The Company pays Achim a monthly fee of 3% of its invoiced sales
originating at the warehouse in connection with these warehousing services
performed by Achim under the Warehousing Agreement. The Company believes that
the terms of each transaction, under the agreement, are at least as favorable to
the Company as those it would expect to negotiate with unrelated parties.

The Warehousing Agreement has a term of two years and is automatically renewable
for additional one-year periods unless written notice of termination is given at
least six months prior to the commencement of a renewal period. During the
fiscal year ended April 30, 2004, the Company accrued approximately $322,000 in
fees under the Warehousing Agreement.
In addition, as an accommodation, during 2004 sales made to certain customers
are billed by and through the related company. At April 30, 2004 $72,767 is due
from the related company for such sales.

Achim is wholly owned by Marton B. Grossman, the Company's Chairman and
President.

Pursuant to a Security Agreement dated as of January 2,2001 between the Company
and Achim, Achim has perfected its security interest in the accounts,
collateral, documents, general intangibles, instruments and inventory of the
Company. This security agreement is intended to secure amounts due to Achim for
purchases of inventory Achim has made for the Company, for which Achim has
charged the Company without markup, and for advances of working capital to the
Company. As of April 30,2004 the balance due to Achim was $1,129,000.

The Company occupies 4,500 square feet of office space, located at 58 Second
Avenue, Brooklyn, New York. The property is leased by Achim from C&F Second
Avenue. Since Achim is the lessee, Achim makes the property available to the
Company on an at-will basis. In addition, the Company occupies space in a
warehouse located at 1600 Livingston Avenue, North Brunswick, New Jersey. The
Company occupies space in this warehouse on an as needed basis and at will
basis. The property is leased by Achim from 1600 Rt.1, LLC. Other than the fees
payable by the Company under the Warehousing Agreement, the Company pays no rent
for the property. See Part I ITEM 1. BUSINESS "Management Agreement with Achim
Importing Co., Inc". and ITEM 2. DESCRIPTION OF PROPERTIES.


                                    Page 17
<PAGE>

Marton B. Grossman, President of the Company, and Isaac Grossman, Treasurer of
the Company, perform operational and administrative duties as obligated by their
positions. The executive compensation table (See Part iii Item 111) lists other
compensation for the fiscal year ended April 30,2004 of $31,200 and $32,240, for
Marton B. Grossman and Isaac Grossman, respectively. This compensation consists
of estimated portion of the fees payable to Achim under the Warehousing
Agreement attributable to Marton B. Grossman and Isaac Grossman's activities
performed on behalf of the Company.


ITEM 13. EXHIBITS AND REPORTS ON FORM 8K


3.       Exhibits

         The Index to Exhibits following the Signature Page indicates the
         exhibits, which are being filed herewith, and the exhibits, which are
         incorporated herein by reference.

(b)      Reports on Form 8-K

         No Reports on Form 8-K were filed during the last quarter of the fiscal
         year ended April 30, 2004.



ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Israeloff, Trattner and Company (IT) audited the Company's financial statements
for the fiscal year ended April 30,2004; the fees billed for professional
services by IT were as follows: Audit fees-$22,000;Tax fees- $4,000 (for
preparation of federal and state tax income tax returns);Quarterly reviews of
Forms 10QSB- $9,000.


                                    Page 18
<PAGE>

                                   SIGNATURES


Pursuant to the requirements of Section 13 OR 15(d) of the Securities Exchange
Act of 1934, Registrant has duly caused this registration statement to be signed
on its behalf by the undersigned thereunto duly authorized.

                           DYNAMIC INTERNATIONAL, Inc.



                           By: /s/ Marton B. Grossman
                              --------------------------
                                Marton B. Grossman
                                Chairman and President

Dated: 12th day of August 2004


Pursuant to the requirements of the Securities Exchange Act of 1934, this Report
has been signed below as of the 29th day of July, 2004 by the following persons
on behalf of Registrant and in the capacities indicated.



Name                                           Date
----                                           -----

/s/ Marton B. Grossman                         August 12, 2004
----------------------
Marton B. Grossman
Chairman and President



/s/ Isaac Grossman                              August 12, 2004
----------------------
Isaac Grossman
Vice Chairman, Treasurer & Secretary




/s/ William P. Dolan                            August 12, 2004
----------------------
William P. Dolan
Vice President--Finance
(Chief Financial & Accounting Officer)



                                    Page 19
<PAGE>


                           DYNAMIC INTERNATIONAL, INC.

                              FINANCIAL STATEMENTS
                                       AND
                                AUDITORS' REPORT

                   FOR THE YEARS ENDED APRIL 30, 2004 AND 2003




<PAGE>



                                    CONTENTS



                                                                           Page
                                                                           ----

AUDITORS' REPORTS                                                           F-1

FINANCIAL STATEMENTS

     Balance Sheet as of April 30, 2004                                     F-2
     Statements of Operations for the Years Ended April 30, 2004 and 2003   F-3

     Statements of Stockholders' Equity/ (Deficit) for the Years Ended
         April 30, 2004 and 2003                                            F-4

     Statements of Cash Flows for the Years Ended April 30, 2004 and 2003   F-5

     Notes to Financial Statements                                     F-6-F-14




<PAGE>




                          INDEPENDENT AUDITOR'S REPORT


To the Board of Directors and Shareholders
Dynamic International, Inc.


We have audited the accompanying balance sheet of Dynamic International, Inc. as
of April 30, 2003, and the related statements of operations, stockholders'
equity/ (deficit), and cash flows for each of the two years ended April 30, 2004
and 2003. 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 the standards of the Public Company
Accounting Oversight Board (United States of America). Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
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 Dynamic International, Inc. as
of April 30, 2004, and the results of its operations and its cash flows for each
of the two years ended April 30, 2004 and 2003 in conformity with accounting
principles generally accepted in the United States of America.




Garden City, New York                         /s/ Israeloff, Trattner & co, P.C.
July 23,2004                                  Israeloff, Trattner & Co, P.C.
                                              Certified Public Accountants




                                      F-1
<PAGE>

                           DYNAMIC INTERNATIONAL, INC.

                                  BALANCE SHEET

                                 APRIL 30, 2004

                                     ASSETS
CURRENT ASSETS
     Cash                                                         $     6,783
     Accounts receivable, less allowance for
        doubtful  accounts of $137,000                                835,889
     Due from affiliated Company                                       72,767
     Inventories                                                      750,872
     Deferred Taxes - Current                                         270,000
     Other current assets                                             120,707
                                                                  -----------

              Total Current Assets                                  2,057,018
                                                                  -----------

PROPERTY AND EQUIPMENT
     Auto                                                              21,285
     Furniture and Equipment                                           30,700
                                                                  -----------
                Total Cost                                             51,985
     Less: Accumulated depreciation                                   (11,073)
                                                                  -----------

                Property and Equipment - Net                           40,912
                                                                  -----------

OTHER ASSETS
     Deferred Income Taxes                                            270,000
     Other                                                              1,000
                                                                  -----------
     Total Other Assets                                               271,000
                                                                  -----------

                TOTAL ASSETS                                      $ 2,368,930
                                                                  -----------

                           LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
     Accounts payable and accrued expenses                        $   822,337
     Amounts due affiliated company                                 1,128,803
     Income Taxes Payable                                              32,619
                                                                  -----------

               Total Current Liabilities                            1,983,759
                                                                  -----------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY
Common stock - par value $.001 per share; authorized
         50,000,000 shares; issued 4,418,258 shares                     4,419
     Additional paid-in capital                                     5,119,796
     Accumulated deficit                                           (4,739,041)
                                                                  -----------
                                                                      385,174
     Less:  Cost of 540 shares of treasury stock                           (3)
                                                                  -----------

            Total Stockholders' Equity                                385,171
                                                                  -----------

            TOTAL LIABILITIES AND STOCKHOLDERS'
            EQUITY                                                $ 2,368,930
                                                                  ===========

                 See accompanying notes to financial statements.

                                       F-2

<PAGE>





                           DYNAMIC INTERNATIONAL, INC.

                            STATEMENTS OF OPERATIONS

                   FOR THE YEARS ENDED APRIL 30, 2004 AND 2003

                                              For the Years Ended
                                                     April 30,
                                            --------------------------
                                                2004          2003
                                            -----------    -----------

Net Sales                                   $ 6,922,162    $ 7,441,006

Cost of Sales                                 4,174,019      5,198,358
                                            -----------    -----------

         Gross profit                         2,748,143      2,242,648
                                            -----------    -----------

Operating Expenses
     Royalty expense                            314,936        366,785
     Shipping expense                           496,708        542,493
     Selling expense                            450,755        490,253
     Advertising and promotion                  105,653        105,050
     General and administrative                 300,955        262,659
     Depreciation and amortization               10,488          6,705
     Interest and bank charges                    9,843         15,165
     Interest - related party                    64,370        135,974
                                            -----------    -----------

         Total operating expenses             1,753,708      1,925,084
                                            -----------    -----------

         Income before income
              taxes                             994,435        317,564

Income tax benefit                             (486,000)           -
                                            -----------    -----------

         Net income                         $ 1,480,435    $   317,564
                                            -----------    -----------

Per Share Data:
Basic and Diluted Income Per Share          $       .34    $       .07
                                            -----------    -----------
Basic and Diluted Weighted Average
  Common Shares Outstanding                   4,417,718      4,417,718
                                            ===========    ===========



                 See accompanying notes to financial statements.

                                       F-3


<PAGE>



                           DYNAMIC INTERNATIONAL, INC.

                  STATEMENTS OF STOCKHOLDERS' EQUITY/ (DEFICIT)
                   FOR THE YEARS ENDED APRIL 30, 2004 AND 2003


<TABLE>
<CAPTION>
                                                         Additional                                                   Total
                                       Common             Paid-In          Accumulated         Treasury           Stockholders'
                                        Stock             Capital            Deficit            Stock           Equity/ (Deficit)
                                   ---------------    --------------      --------------      -----------         -------------

<S>                                <C>                <C>                <C>                 <C>                 <C>
Balance - May 1, 2002                $     4,419        $ 5,119,796        $(6,537,040)        $        (3)        $  (695,914)


Net income for the year ended
    April 30,2003                            -                  -              317,564                 -               317,564
                                     -----------        -----------        -----------         -----------         -----------

Balance - April 30, 2003                   4,419          5,119,796         (6,219,476)                 (3)         (1,095,264)

Net Income for the year ended
    April 30,2004                            -                  -            1,480,435                 -             1,480,435
                                     -----------        -----------        -----------         -----------         -----------

Balance - April 30, 2004             $     4,419        $ 5,119,796        $(4,739,041)        $        (3)        $   385,171
                                     ===========        ===========        ===========         ===========         ===========

</TABLE>


                 See accompanying notes to financial statements.

                                       F-4



<PAGE>



                           DYNAMIC INTERNATIONAL, INC.

                            STATEMENTS OF CASH FLOWS

                   FOR THE YEARS ENDED APRIL 30, 2004 AND 2003


<TABLE>
<CAPTION>
                                                                2004           2003
                                                            -----------    -----------
<S>                                                         <C>            <C>
CASH FLOWS FROM OPERATING
    ACTIVITIES
       Net Income                                           $ 1,480,435    $   317,564
       Adjustments to reconcile net income
          to net cash used by
          operating activities:
              Deferred Income Taxes                            (540,000)           -
              Depreciation and amortization                      10,488          6,705
               Changes in assets and liabilities:
                 Accounts receivable                            185,305        (72,574)
                 Due from affiliated company                    (72,767)           -
                 Inventories                                    678,145        306,873
                 Prepaid expenses and
                    other current assets                        (89,608)        58,848
                 Accounts payable and
                    accrued expenses                             58,006         (8,949)
                 Income taxes payable                            32,619            -
                                                            -----------    -----------
                        Total adjustments                       262,188        290,902
                                                            -----------    -----------

               Net cash provided by
                 operating activities                         1,742,623        608,467
                                                            -----------    -----------



CASH FLOWS FROM INVESTING ACTIVITIES

       Purchase of property and equipment                         -             21,285
                                                            -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES

       Amounts due affiliated company                        (1,772,488)      (588,540)
                                                            -----------    -----------


NET DECREASE IN CASH                                            (29,865)        (1,358)

CASH - beginning                                                 36,648         38,006
                                                            -----------    -----------

CASH - end                                                  $     6,783    $    36,648
                                                            ===========    ===========

                       SUPPLEMENTAL CASH FLOW INFORMATION

Cash paid for interest                                      $     9,843    $    15,165
                                                            -----------    -----------
Cash Paid for Income Taxes                                  $    21,381    $       775
                                                            -----------    -----------

</TABLE>


                 See accompanying notes to financial statements

                                       F-5


<PAGE>

                           DYNAMIC INTERNATIONAL, INC.

                          NOTES TO FINANCIAL STATEMENTS

                   FOR THE YEARS ENDED APRIL 30,2004 AND 2003


1. FORMATION OF DYNAMIC INTERNATIONAL, INC.

       Dynamic International, Inc. ("the Company") was formed on August 31, 2000
       as a wholly owned subsidiary of Dynamic International, Ltd. ("Ltd."
       and/or "Predecessor"). Pursuant to an Equity Transfer and Reorganization
       Agreement dated August 10, 2000, by and among Ltd., certain of its
       shareholders, Emergent Management Company, LLC ("Emergent") and several
       holders of membership (equity) interests in Emergent Ventures LLC, the
       Predecessor transferred all of its assets to the Company on August 30,
       2000. Moreover, all of its liabilities (other than outstanding bank debt
       in the amount of $250,000) were assumed by the Company, on August 30,
       2000. Immediately following the transfer of assets and assumptions of
       liabilities by the Company, Ltd. transferred to its shareholders, on a
       pro-rata basis, all of the issued shares of common stock of the Company.

       Subsequently, Ltd. issued an aggregate of 39,755,178 shares of its common
       stock, representing a 90% equity interest in Ltd., to the several members
       of Emergent Ventures, a Delaware limited liability company, previously
       unrelated to Ltd., that had theretofore engaged in the business of
       acquiring equity interests in technology businesses. In exchange for the
       issuance of these shares, Ltd. received all of the then outstanding
       membership interests in Emergent Ventures.



2.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

       NATURE OF OPERATIONS

       The Company designs and markets related sports bags and luggage, which
       are marketed primarily under the licensed name JEEPTM and under its own
       names Santa FeTM, Polaris ExpeditionTM and SPORTS GEARTM. The Company's
       objective is to become a designer and marketer of goods, domestically and
       internationally, that are associated with a free-spirited lifestyle and
       leisure time.



       CASH AND CASH EQUIVALENTS

       The Company considers all highly liquid investments with a maturity of
       three months or less when purchased to be cash equivalents.

       ACCOUNTS RECEIVABLE

       Accounts receivable have been adjusted for all known uncollectible
       accounts and are stated at the amount management expects to collect from
       outstanding balances. Based on management's evaluation of collectibility,
       an allowance for doubtful accounts has been provided.


                                       F-6

<PAGE>

                           DYNAMIC INTERNATIONAL, INC.

                          NOTES TO FINANCIAL STATEMENTS

                   FOR THE YEARS ENDED APRIL 30, 2004 AND 2003


2.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

       INVENTORIES

       Inventories consist principally of finished goods and are stated at the
       lower of cost; first-in, first-out method, ("FIFO") or market.

       PROPERTY, EQUIPMENT AND DEPRECIATION

       Property and equipment are stated at cost. Depreciation is computed using
       accelerated methods over the estimated useful lives of the respective
       assets. Expenditures for maintenance and repairs, which do not improve or
       extend the life of the respective assets, are expensed currently while
       major repairs are capitalized. Estimated useful lives used in calculating
       depreciation are as follows:

              Auto                             5 Years
              Furniture and Equipment          5 Years

       ADVERTISING AND PROMOTION

       Advertising and promotion expenses are charged to operations when the
       advertising first takes place.


       REVENUE

       Revenue is recognized when the goods have been shipped and accepted by
       the customer. The Company's return policy is for defective merchandise
       only.

       PROMOTIONAL ALLOWANCES

       Based on a discretionary policy, management grants to certain major
       retail customers promotional allowances to successfully market the
       Company's products. Promotional allowances are primarily targeted to the
       cost of displays, advertising and other promotional incentives. The cost
       of promotional allowances are accrued at the time that related revenues
       are recognized and are estimated based upon current arrangements with
       customers as well as certain assumptions based on the Company's prior
       experience with customers. Promotional allowances are included as a
       reduction of net sales.

       INCOME PER SHARE

       Basic and diluted income per share is calculated by dividing net income
       by the weighted average number of common shares outstanding during the
       year.


                 See accompanying notes to financial statements


                                       F-7

<PAGE>


                           DYNAMIC INTERNATIONAL, INC.

                          NOTES TO FINANCIAL STATEMENTS

                   FOR THE YEARS ENDED APRIL 30, 2004 AND 2003


2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)


       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,
       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.


       DEFERRED INCOME TAXES

       Deferred tax assets and liabilities are recognized for the future tax
       consequences attributable to differences between the financial statement
       carrying amounts of existing assets and liabilities and their respective
       tax bases. Deferred tax assets and liabilities are measured using enacted
       tax rates expected to apply to taxable income in the years in which those
       temporary differences are expected to be recovered or settled. The effect
       on deferred tax assets and liabilities of a change in tax rates is
       recognized in income in the period that includes the enactment date.


       FAIR VALUE OF FINANCIAL INSTRUMENTS

       SFAS No. 107, "Disclosure About Fair Value of Financial Instruments,"
       requires certain disclosures regarding the fair value of financial
       instruments. In assessing the fair value of these financial instruments,
       the Company has used a variety of methods and assumptions, which were
       based on estimates of market conditions and risks existing at that time.
       Cash and cash equivalents, accounts receivable, accounts payable and
       accrued expenses, and debt are reflected at cost in the financial
       statements, which approximates fair value because of the short-term
       maturity of these instruments. It is not practicable for the Company to
       estimate the fair value of the amount due to its affiliate since there is
       no quoted market price and the Company can not estimate its fair value
       without incurring excessive costs.








                                       F-8


<PAGE>


                           DYNAMIC INTERNATIONAL, INC.

                          NOTES TO FINANCIAL STATEMENTS

                   FOR THE YEARS ENDED APRIL 30, 2004 AND 2003

2.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)


       NEW ACCOUNTING PRONOUNCEMENTS

       In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB
       Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and
       Technical Corrections. " For most companies, SFAS No. 145 will require
       gains and losses on extinguishments of debt to be classified as income or
       loss from continuing operations, rather than as an extraordinary item as
       previously required. Extraordinary treatment will be required for certain
       extinguishments as provided in APB Opinion No. 30. SFAS No. 145 also
       amends SFAS No. 13 to require that certain modifications to capital
       leases be treated as a sale-leaseback, and to modify the accounting for
       sub-leases when the original lessee remains a secondary obligor.
       Companies are required to adopt the provisions of SFAS No. 145 in the
       first quarter of 2003. Any gain or loss on extinguishment of debt that
       was classified as an extraordinary item in prior periods presented that
       does not meet the criteria in APB Opinion No. 30 for classification as an
       extraordinary item shall be reclassified. The adoption of SFAS No. 145 is
       not expected to have a material impact on the Company `s financial
       position or results of operations.

       In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs
       Associated with Exit or Disposal Activities, " which addresses financial
       accounting and reporting for costs associated with exit or disposal
       activities, and nullified Emerging Issues Task Force Issue No. 94-3. "
       Liability Recognition for Certain Employee Termination Benefits and other
       Costs to Exit an Activity (including Certain Costs Incurred in a
       Restructuring). " SFAS No. 146 required that a liability for a cost
       associated with an exit or disposal activity be recognized when the
       liability is incurred. The requirements of SFAS No. 146 apply
       prospectively to activities that are initiated after December 31, 2002
       and, as a result, the Company cannot reasonably estimate the impact of
       adopting these new rules until and unless it undertakes relevant
       activities in future periods.


       In November 2002, the FASB issued Interpretation ("FIN") No. 45
       "Guarantor's Accounting and Disclosure Requirements for Guarantees,
       Including Indirect Guarantees of Indebtedness of Others, " which
       clarifies the required disclosures to be made by a guarantor in their
       interim and annual financial statements about its obligations under
       certain guarantees that it has issued. FIN No. 45 also requires a
       guarantor to recognize at the inception of the guarantee, a liability for
       the fair value of the obligation undertaken. The Company is required to
       adopt the disclosure requirements of FIN No. 45 for financial statements
       ending December 31, 2002. The Company is required to adopt and
       accordingly has adopted prospectively the initial recognition and
       measurement provisions of FIN No. 45 for guarantees issued or modified
       after December 31, 2002 and, as a result, the Company cannot reasonable
       estimate the impact of adopting these new rules until and unless it
       undertakes relevant activities in future periods.


                                       F-9


<PAGE>

                           DYNAMIC INTERNATIONAL, INC.

                          NOTES TO FINANCIAL STATEMENTS

                   FOR THE YEARS ENDED APRIL 30, 2004 AND 2003


2.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

       In May 2003, the FASB issued Statement of Financial Accounting Standards
       No. 150, " Accounting for Certain Financials Instruments with
       Characteristics of both Liabilities and Equity" (SFAS 150). SFAS 150
       addresses certain financial instruments that, under previous guidance,
       could be accounted for as equity, but now must be classified as
       liabilities in statements of financial position. These financial
       instruments include (i) mandatory redeemable financial instruments, (ii)
       obligations to repurchase the issuer's equity shares by transferring
       assets, and (iii) obligations to issue a variable number of shares. SFAS
       150 is generally effective for all financial instruments entered into or
       modified after May 31, 2003, and otherwise effective at the first interim
       period beginning after June 15, 2003. The adoption of the effective
       provisions of SFAS 150 did not have any impact on the Company's financial
       position or statement of operations.


3.     RELATED PARTY TRANSACTIONS

       Pursuant to a Warehouse and Service Agreement dated as of September 21,
       2000 (the "Warehousing Agreement") between the Company and a related
       party (the "Related Entity") wholly owned by a major stockholder, the
       Related Entity provides occupancy space in an administrative facility in
       New York and a warehouse in New Jersey, and performs certain
       administrative services on behalf of the Company. Under the Warehousing
       Agreement, the Related Entity, among other things, assists in the
       maintenance of financial and accounting books and records, in the
       preparation of monthly financial accounts receivable aging schedules and
       other reports and in the performance of credit checks on the Company's
       customers. In consideration for these services, the Related Entity
       receives an annual fee, payable monthly, calculated at a percentage of
       the Company's invoiced sales originating at the warehouse ranging from 4%
       of the invoiced sales under $30 million annually to 3% of sales of $60
       million or more. For sales which do not originate at the warehouse, the
       Related Entity receives a service fee in the amount of 1.5% of the
       Company's invoiced sales to customers and accounts located in the United
       States if payment is made by letter of credit and 1% if such customers
       and accounts are located outside the United States, irrespective of
       manner of payment. In addition, under the Warehousing Agreement, the
       Related Entity provides warehousing services consisting of receiving,
       shipping, and storing of the Company's merchandise. The Company pays the
       Related Entity a monthly fee of 3% of its invoiced sales originating at
       the warehouse in connection with these warehousing services performed by
       the Related Entity under the Warehousing Agreement. As part of the
       Warehousing Agreement, the Company applies an offset for certain shared
       expenses.





                                      F-10

<PAGE>

                           DYNAMIC INTERNATIONAL, INC.

                          NOTES TO FINANCIAL STATEMENTS

                   FOR THE YEARS ENDED APRIL 30, 2004 AND 2003

3.     RELATED PARTY TRANSACTIONS (CONTINUED)


       The Warehousing Agreement, which was renewed on September 21, 2000, has a
       term of two years and then automatically renews from year to year unless
       written notice of termination is given at least six months prior to the
       commencement of a renewal period. Total warehousing and administrative
       expenses charged to operations were $321,986 and $405,689 for the years
       ended April 30, 2004 and 2003, respectively.


       In addition, the Related Entity has purchased inventory for the Company
       and has charged the Company for the invoiced amount of the inventory.
       Pursuant to an unwritten understanding, the Related Entity arranges for
       the issuance, by its financial lender, of letters of credit in favor of
       the Company's overseas suppliers, thereby enabling the Company to finance
       the purchases of its inventory.

       Pursuant to a Security Agreement dated as of January 2, 2001 between the
       Company and the Related Entity, the Related Entity has perfected its
       security interest in all of the Company's assets.

       Amounts due to the Related Entity totaled $1,128,803 at April 30, 2004.
       The amounts are due on demand. The advance bears interest at the JPMorgan
       Chase prime rate plus 1%. Interest on advances recorded for the fiscal
       years ended April 30, 2004 and 2003 was $64,370 and $135,974,
       respectively

       In addition, as an accommodation, during 2004 sales made to certain
       customers are billed by and through the related company. At April 30,
       2004 $72,767 is due from the related company for such sales.






                                      F-11

<PAGE>

                           DYNAMIC INTERNATIONAL, INC.

                          NOTES TO FINANCIAL STATEMENTS

                   FOR THE YEARS ENDED APRIL 30, 2004 AND 2003


4. INCOME TAXES

         Provision (benefit) for income taxes consists of the following:
         For the years ended April 30         2004          2003
                                            --------      --------
         Current income taxes:
         Federal                           $  11,000      $    -
         State and local                      43,000           -
                                           ---------      --------
                                              54,000           -
         Deferred income tax (benefit)      (540,000)
                                           ---------      --------
         Net income tax benefit            $(486,000)          -
                                           ---------      --------

        The difference between the statutory U.S. Federal income tax rate and
        the Company's effective tax rate as reflected in the statements of
        income is as follows:

<TABLE>
<CAPTION>
        For the years ended April 30:                         2004                        2003
                                                              ----                        ----
                                                                       % of                      % of
                                                                      Pre-tax                   Pre-tax
                                                      Amount          Income      Amount         Income

<S>                                                   <C>              <C>      <C>              <C>
          Tax at Federal statutory rate               $ 338,000        34.0%    $ 108,000        34.0%
          Increases (decreases) in tax resulting from:
          State and local income taxes,
          net of Federal income tax
          benefit                                        95,000         9.6        23,000         7.1%
          Alternative minimum tax                        11,000         1.1           -            -
          Net operating losses carried
          forward                                      (390,000)      (39.3)     (131,000)       41.1%
          Valuation allowance, in excess
          of amount carryforward
          to year ended April 30, 2004                 (537,000)      (54.0)          -            -
          Other, net                                     (3,000)        (.3)          -            -
                                                      ---------       -----      ---------       -----
          Net income tax benefit                      $(486,000)      (48.9%)         -            -
                                                      ---------       -----      ---------       -----
</TABLE>


        Deferred tax assets and deferred tax liabilities at April 30, 2004 and
        2003 are as follows:

        Long Term Deferred Tax Assets (Liabilities)

                                                  2004                  2003
                                              -----------           -----------
        Property and equipment               $    (2,000)          $    (5,000)
        Net operating loss carry forwards      2,170,000             2,560,000
        Valuation allowance                   (1,628,000)           (2,555,000)
                                              -----------           -----------
        Net deferred taxes                   $  (540,000)          $      -
                                              -----------           -----------

       As at April 30, 2004 the Company had net operating loss carryforwards of
       approximately $4,000,000. The tax benefits from the carryforwards expire
       as follows: $574,000 in 2019, $563,000 in 2020, $555,000 in 2021 and
       $478,000 in 2022.


                                      F-12



<PAGE>

                           DYNAMIC INTERNATIONAL, INC.

                          NOTES TO FINANCIAL STATEMENTS

                     FOR THE YEARS ENDED APRIL 30, 2004 AND 2003


5.     COMMITMENTS AND CONTINGENCIES

       ROYALTY OBLIGATIONS


       The Company has entered into various royalty, licensing, and commission
       agreements to sell products. Under the agreements minimum aggregate
       royalty payments are as follows:

       Fiscal Year Ending April 30,
               2005                       $412,000
               2006                       $424,667
               2007                       $450,000
               2008                       $450,000
               2009                       $458,333
               Thereafter                 $816,666
                                        ----------
                                        $3,011,666
                                        ----------
       Royalty expense charged to operations for the years ended April 30, 2004
       and 2003 was approximately $315,000 and $367,000, respectively.

       The Company has answered a complaint filed by 3L Associates. The Company
       entered into a license agreement with 3L Associates in September of 2000,
       under which agreement the Company was given the license to use the
       trademark Adolfo in connection with luggage and accessories. The
       complaint alleges that the Company did not pay minimum royalties of
       $25,000 for the period April 1, 2002 to March 31, 2003. The complaint
       also alleges that the Company did not give the required notice to 3L
       Associates that the Company did not wish to extend the term of the
       license agreement. In the complaint, 3L Associates demands judgment
       against the Company in the amount of $300,000, together with its expenses
       and reasonable attorney's fees, legal interest and costs, and such other
       and further relief as shall seem just and proper to the court. The
       Company is vigorously defending against the suit.


6.     MAJOR CUSTOMERS/SEASONALITY

       During the year ended April 30, 2004, sales to four major customers were
       approximately 76% of the Company's net sales. At April 30, 2004, accounts
       receivable from these customers totaled 76% of net accounts receivable.

       During the year ended April 30, 2003, sales to four major customers were
       approximately 73% of the Company's net sales. At April 30, 2003 accounts
       receivable from these customers totaled approximately 90% of net accounts
       receivable.

       The Company's business is highly seasonal with higher sales typically in
       the second and third quarters of the fiscal year as a result of sales of
       merchandise related to the holiday season.



                                      F-13

<PAGE>

                           DYNAMIC INTERNATIONAL, INC.

                          NOTES TO FINANCIAL STATEMENTS

                   FOR THE YEARS ENDED APRIL 30, 2004 and 2003



7.     CREDIT RISK/FINANCIAL INSTRUMENTS


       Due to the nature of its business and the volume of sales activity, the
       Company's cash balance occasionally exceeds the $100,000 protection of
       FDIC insurance. At April 30, 2004, there were no such excess balances.
       The Company has not experienced any credit losses arising from excess
       cash balances and believes it is not exposed to any significant credit
       risk from cash and cash equivalents.


       The Company routinely assesses the financial strength of its customers
       and, based upon factors surrounding the credit risk of its customers,
       establishes an allowance for uncollectible accounts and, as a
       consequence, believes that it does not have an accounts receivable credit
       risk exposure beyond the allowance provided. The Company does not require
       collateral or other security to support financial instruments subject to
       credit risk.


8.     SIGNIFICANT RISKS AND UNCERTAINTIES

       The Company's luggage products compete with products designed by a number
       of the largest companies in the industry. Accordingly, there can be no
       assurance that the Company will be able to effectively compete with these
       companies as well as with other smaller entities. The Company sells
       products domestically throughout the United States.

       Most of the Company's products are purchased from China. The Company
       believes that, if necessary, it will be able to obtain its products from
       firms located in other countries at little, if any, additional expense.
       The Company believes that an interruption in deliveries by a manufacturer
       located in a particular country will not have a material adverse impact
       on the business of the Company. Nevertheless, because of political
       instability in a number of the supply countries, occasional import quotas
       and other restrictions on trade or otherwise, there can be no assurance
       that the Company will at all times have access to a sufficient supply of
       merchandise.


                                      F-14
<PAGE>


EXHIBITS

1.01     Asset Transfer Agreement dated August 31, 2000 by and between
         Dynamic International Ltd. ("Ltd") and the Company*

1.02     Bill of Sale dated August 31, 2000 between Ltd. and the Company*

2.01     Articles of Incorporation and Bylaws*

10.01    Amendment to License Agreement with Spalding and Even flow
         Companies dated October 27, 2000*

10.02    License agreement with 3L Associates dated September 1, 2000*

10.03    Security Agreement dated January 2, 2001 with Achim Importing Co,
         Inc.*

10.04    Warehousing and Service Agreement dated as of September 1, 1996
         with Achim Importing Co., Inc.*

10.05    Equity Transfer and Reorganization Agreement dated as of August 7,
         2000 by and among Ltd., Marton B. Grossman, Isaac Grossman,
         Emergent Management Company, LLC and Emergent Ventures, LLC (1)

10.06    Amendment D to the "Jeep" license agreement dated April 19, 2002 (1)

10.07    Amendment E to the "Jeep" license agreement dated April 2, 2002  (1)

10.08    Amendment F to the "Jeep" license agreement dated September
         17, 2003

10.09    Amendment G to the "Jeep" license agreement dated November
         21, 2003

10.10    Amendment H to the "Jeep" license agreement dated April 22, 2004

31.1     CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-
         OXLEY ACT OF 2002

31.2     CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-
         OXLEY ACT OF 2002

32.1     CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-
         OXLEY ACT OF 2002

32.2     CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-
         OXLEY ACT OF 2002

*        Filed as exhibits to Registration Statement on Form 10-SB file
         October 30, 2001

(1)      Filed as exhibits to form 10KSB filed on August 13, 2002