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

                                 FORM 10-QSB


(Mark One)
[X]     QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
        SECURITIES EXCHANGE ACT OF 1934
              For the quarterly period ended June 30, 2002

                                      OR

[ ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
        SECURITIES EXCHANGE ACT OF 1934
              For the transition period from  _______ to ________

                       Commission file number: 000-28684

                              BoysToys.com, Inc.
                              ------------------
             (Exact Name Of Small Business Issuer In Its Charter)

               DELAWARE                               33-0824801
        -----------------------                ------------------------
     (State or Other Jurisdiction                  (I.R.S. Employer
   of Incorporation or Organization)              Identification No.)

                412 Broadway, San Francisco, California 94133
                ---------------------------------------------
                   (Address of principal executive office)

                                (415) 391-2800
                                --------------
             (Registrant's telephone number, including area code)


            ------------------------------------------------------
             (Former Name, Former Address, and Former Fiscal Year,
                        If Changed Since Last Report)


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

The number of shares outstanding of the Registrant's Common Stock as of
June 30, 2002 was 8,172,139 shares.

===============================================================================
<PAGE>
                              BoysToys.com, Inc.
<TABLE>
                              TABLE OF CONTENTS

<CAPTION>
                                                                         Page
                                                                        Number
<S>                                                                     <C>
PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements
         Consolidated Balance Sheets
              June 30, 2002 (unaudited) and June 30, 2001 . . . . . . .    F-1
         Consolidated Statements of Operations (unaudited)
              Three Months Ended June 30, 2002 (unaudited)
              and Three Months Ended June 30, 2001 (unaudited)
              and Six Months Ended June 30, 2002 (unaudited)
              and Six Months Ended June 30, 2001  . . . . . . . . . . .    F-2
         Consolidated Statements of Cash Flows (unaudited)
              Six Months Ended June 30, 2002 and June 30, 2001  . . . .    F-3
         Notes to Consolidated Financial Statements (unaudited) . . . .    F-4

Item 2.  Management's Discussion and Analysis of Financial Condition
         and Results of Operations  . . . . . . . . . . . . . . . . . .     14

Item 2A. Factors That May Affect Future Results . . . . . . . . . . . .     30


PART II - OTHER INFORMATION

Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . .     35

Item 2. Changes in Securities . . . . . . . . . . . . . . . . . . . . .     35

Item 3. Defaults Upon Senior Securities . . . . . . . . . . . . . . . .     35

Item 4. Submission of Matters to a Vote of Security Holders . . . . . .     35

Item 5. Other Information . . . . . . . . . . . . . . . . . . . . . . .     35

Item 6. Exhibits and Reports on Form 8-K  . . . . . . . . . . . . . . .     35

SIGNATURES  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     36
</TABLE>

                                    -  2 -
===============================================================================
<PAGE>
Part I.  Financial Information
Item 1.  Financial Statements

<PAGE>
                              BOYSTOYS.COM, INC.
<TABLE>
                         CONSOLIDATED BALANCE SHEETS
                  As of June 30, 2002 and December 31, 2001

<CAPTION>
                                                June 30,    December 31,
                                                  2002          2001
                                               ----------    ----------
<S>                                            <C>           <C>
                   ASSETS
Current Assets:
     Cash                                      $   62,564    $   83,655
     Employee Advances                              7,316         1,065
     Prepaid Expenses                              25,893        40,531
     Inventory                                     50,702        46,992
                                               ----------    ----------
Total Current Assets                              146,475       172,243

Property and Equipment, Net                     2,262,777     2,450,417

Other Assets:
     Note Receivable - Officer                     32,738        31,801
     Investment in Fine Art                        25,320        22,000
     Deposits                                      52,718        52,718
                                               ----------    ----------
Total Other Assets                                110,776       106,519
                                               ----------    ----------

TOTAL ASSETS                                   $2,520,028    $2,729,179
                                               ==========    ==========


     LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities:
     Accounts Payable and Accrued Expenses     $  215,675    $  264,587
     Equipment Lease Payable                       20,779        24,324
     Accrued Interest                             193,860       193,860
     Convertible Debt                           1,818,111     1,818,111
                                               ----------    ----------
Total Current Liabilities                       2,248,425     2,300,882
                                               ----------    ----------
TOTAL LIABILITIES                               2,248,425     2,300,882

Shareholders' Equity:
Preferred stock, $.01 par value (10,000,000
     authorized; none issued and outstanding.)       -             -
Common Stock, $.01 par value (20,000,000
     shares authorized; issued and outstanding:
     8,172,139 as of June 30, 2002 and
     December 31, 2001)                            81,721        81,721
Additional Paid-in-capital                      9,535,158     9,535,158
Common stock subscribed                           (62,500)      (62,500)
Deficit accumulated during development stage   (7,856,576)   (7,856,576)
Retained earnings                              (1,426,200)   (1,269,506)
                                               ----------    ----------
Total Shareholders' Equity                        271,603       428,297
                                               ----------    ----------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY     $2,520,028    $2,729,179
                                               ==========    ==========

<FN>
               See Notes to Consolidated Financial Statements.
</TABLE>

                                     F-1
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<PAGE>
                              BOYSTOYS.COM, INC.
<TABLE>
                    CONSOLIDATED STATEMENTS OF OPERATIONS
                For the Six Months Ended June 30, 2001 and 2000

<CAPTION>
                                                For the Six Months        For the Three Months
                                                  Ended June 30,             Ended June 30,
                                              -----------------------   -----------------------
                                                 2002         2001         2002         2001
                                              ----------   ----------   ----------   ----------
<S>                                           <C>          <C>          <C>          <C>
Revenues                                      $1,190,209   $1,256,536   $  567,225   $  638,670

Cost of Sales                                    175,196      189,559       79,927       94,462
                                              ----------   ----------   ----------   ----------
Gross Profit                                   1,015,013    1,066,977      487,298      544,208

Depreciation & Amortization                     (195,881)        -         (97,970)        -
General & Administrative Expenses               (976,763)   1,104,943)    (461,239)    (571,375)
                                              ----------   ----------   ----------   ----------
Total General & Administrative Expenses       (1,172,644)  (1,104,943)    (559,209)    (571,375)

Operating Loss                                  (157,631)     (37,966)     (71,911)     (27,167)

Other Income (Expenses)
     Interest Income                                 937         -             472         -
     Interest Expense                               -         (82,496)        -         (17,157)
                                              ----------   ----------   ----------   ----------
Total Other Income (Expenses)                        937      (82,496)         472      (17,157)
                                              ----------   ----------   ----------   ----------
Deficit Before Income Taxes                     (156,694)    (120,462)     (71,439)     (44,324)

Provision for Income Taxes                          -            (400)        -            -
                                              ----------   ----------   ----------   ----------

Net Loss                                      $ (156,694)  $ (120,862)  $  (71,439)  $  (44,324)
                                              ==========   ==========   ==========   ==========

Net loss per share                            $   (0.02)   $   (0.01)   $   (0.01)   $   (0.01)
                                              ==========   ==========   ==========   ==========

Weighted average shares used
     for net loss per share                    8,172,139    8,172,139    8,172,139    8,172,139
                                              ==========   ==========   ==========   ==========

Net loss per diluted share                    $   (0.02)   $   (0.00)   $   (0.01)       (0.00)
                                              ==========   ==========   ==========   ==========

Weighted average shares used
     for net loss per diluted share           10,122,139   12,036,892   10,122,139   12,036,892
                                              ==========   ==========   ==========   ==========

<FN>
               See Notes to Consolidated Financial Statements.
</TABLE>

                                     F-2
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<PAGE>
                              BOYSTOYS.COM, INC.
<TABLE>
                    CONSOLIDATED STATEMENTS OF CASH FLOWS
          For the Six and Three Months Ended June 30, 2002 and 2001

<CAPTION>
                                                   For the Six Months        For the Three Months
                                                     Ended June 30,             Ended June 30,
                                                 -----------------------   -----------------------
                                                    2002         2001         2002         2001
                                                 ----------   ----------   ----------   ----------
<S>                                              <C>          <C>          <C>          <C>
Cash Flows from Operating Activities:
     Net Loss                                    $ (156,694)  $ (120,862)  $  (71,439)  $  (44,124)
     Non-cash operating activities
     included in deficit accumulated:
        Amortization and depreciation               195,881      206,851       97,970      110,538
     (Increase) decrease in assets:
        Inventory                                    (3,710)      (3,820)      (5,797)      (5,805)
        Prepaid expenses                             14,638      (24,459)       8,810        7,219
        Employee advances                            (6,251)      (1,736)      (8,274)      (1,785)
        Note receivable-officer                        (937)        -            (472)        -
     Increase (decrease) in liabilities:
        Accounts payable                            (48,912)      57,032      (66,609)      (5,030)
        Equipment lease payable                      (3,545)     (10,689)      (1,772)      (2,455)
        Accrued interest                               -          26,594         -            -
                                                 ----------   ----------   ----------   ----------

Net cash provided (used) by operating activities     (9,530)     128,911      (47,583)      58,558
                                                 ==========   ==========   ==========   ==========

Cash Flows from Investing Activities:
     Purchase of equipment and improvements          (8,241)     (25,015)      (1,132)        -
     Investment in fine art                          (3,320)      (4,000)        (650)      (1,000)
                                                 ----------   ----------   ----------   ----------
Net cash provided (used) by investing activities    (11,561)     (29,015)      (1,782)      (1,000)
                                                 ==========   ==========   ==========   ==========

Cash Flows from Financing Activities :
     Increase (decrease) in convertible notes          -         (57,298)        -         (20,000)
     Stock issuances                                   -            -            -            -
                                                 ----------   ----------   ----------   ----------
Net cash provided (used) by financing activities       -         (57,298)        -         (20,000)
                                                 ==========   ==========   ==========   ==========

Net increase (decrease) in cash                     (21,091)      42,598      (49,365)      37,558

Cash at beginning of period                          83,655       15,927      111,929       20,967
                                                 ----------   ----------   ----------   ----------

Cash at end of period                            $   62,564   $   58,525   $   62,564   $   58,525
                                                 ==========   ==========   ==========   ==========


SUPPLEMENTAL DISCLOSURES OF
     CASH FLOW INFORMATION :

Cash paid during the period for:
     Interest ( net of amount capitalized )      $    9,042   $     -      $    6,309   $     -
                                                 ==========   ==========   ==========   ==========
     Income taxes                                $     -      $     -      $     -      $     -
                                                 ==========   ==========   ==========   ==========

<FN>
               See Notes to Consolidated Financial Statements.
</TABLE>

                                     F-3
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<PAGE>
                              BOYSTOYS.COM, INC.

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF JUNE 30, 2002


NOTE 1 - ORGANIZATION AND BUSINESS

BoysToys.com., Inc. (formerly Alternative Entertainment, Inc.) was incorporated
in the state of Delaware on April 21, 1997, under the name Wagg Corp. ("Wagg").
BoyToys.com, Inc. engages in the business of developing, owning and operating
nightclubs providing exotic dance entertainment combined with a full service
restaurant, lounge, and business meeting facilities.

On December 6, 1993 Alternative Entertainment, Inc. a Nevada corporation ("AEI
Nevada") was formed.  On June 11, 1999, a wholly owned subsidiary was formed,
RMA of San Francisco, Inc., a California Corporation.

On January 15, 1998, Wagg acquired 80% of the outstanding common stock of AEI
Nevada.  On January 25, 1998, the shareholders of AEI Nevada voted to execute a
one-for-three reverse split of its common stock.  On January 26, 1998, the
shareholders of Wagg voted to execute a one-for-two reverse split of its common
stock.  Number of shares and per share amounts have been restated as though the
transaction occurred on December 6, 1993 (Inception).

Following these actions and on January 28, 1998, the AEI Nevada Board of
Directors voted to approve a plan and agreement of reorganization between
Wagg and AEI Nevada.  Under the terms of the reorganization, each share of AEI
Nevada common stock was exchanged for one share of Wagg common stock owed by
AEI Nevada, and all of the assets of AEI Nevada were transferred to Wagg.
This resulted in AEI Nevada becoming a wholly-owned subsidiary of Wagg.
In conjunction with these actions, the shareholders of Wagg approved an
amendment of Wagg's Certificate of Incorporation to change its name to
Alternative Entertainment, Inc., a Delaware Corporation ("AEI").  The
reorganization has been accounted for as a reverse acquisition with a public
shell.  Accordingly, the accompanying consolidated financial statements have
been presented as if AEI Nevada had always been a part of Wagg.

During 1998 Wagg changed its name to AEI.  On December 29, 1998, AEI changed
its name to BoysToys.com, Inc. (the "Company").

Activity for all periods prior to 2000 consisted primarily of efforts devoted
to identifying suitable properties for acquisition, performing administrative
functions, and the initial construction of the Company's first establishment
located in San Francisco, California.  In January 2000 operations commenced on
this locationin San Francisco.

On May 8, 2001 the Company filed a petition for relief under Chapter 11 of the
United States Bankruptcy Code.  The filing was in response to an unexpected
attempt by the landlord to terminate the Company's long-term lease for the club
in San Francisco (See Note 13).


                                     F-4
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<PAGE>
                              BOYSTOYS.COM, INC.

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF JUNE 30, 2002


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of the Company and
its wholly owned subsidiaries, RMA of San Francisco, Inc. and AEI Nevada.
All significant intercompany transactions and balances have been eliminated.

BASIS OF ACCOUNTING

The Company's policy is to use the accrual method of accounting and to prepare
and present financial statements in accordance with generally accepted
accounting principles.

FINANCIAL INSTRUMENTS

The carrying amounts reported in the balance sheets for cash, accounts payable
and accrued expenses approximate fair value due to the immediate short-term
maturity of these financial instruments.

The fair value of the Company's notes payable and convertible debt approximates
the carrying amount based on the current rates offered to the Company for debt
of the same remaining maturities with similar collateral requirements.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost.  The Company is currently
capitalizing all leasehold improvements, equipment and fixtures associated with
the development of its first establishment located in San Francisco,
California.  Equipment and fixtures are being depreciated using the straight-
line method over the estimated asset lives ranging from 3 to 7 years.
Leasehold improvements are being amortized using the straight-line method over
the shorter of either the estimated life of the improvements or the length of
the lease.

Leasehold improvements are primarily architectural, planning and construction
costs associated with construction of the facility.  Equipment and fixtures are
primarily computer systems, furniture, lighting, sound and video equipment.
The Company applies the provisions of Statement of Financial Accounting
Standards SFAS No. 34.  Consequently, interest cost related to the construction
of the Company's first establishment was capitalized and is being amortized
consistent with the leasehold improvements.  Capitalized interest totaled
$284,496.


                                     F-5
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<PAGE>
                              BOYSTOYS.COM, INC.

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF JUNE 30, 2002


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

STOCK BASED COMPENSATION

In October 1995, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 123, "Accounting for
Stock-Based Compensation."  This statement allows entities to measure
compensation costs related to awards of stock-based compensation, using either
the fair value method or the intrinsic value method.  The Company has elected
to account for stock-based compensation programs using the intrinsic value
method.

Companies that do not choose to adopt the expense recognition rules of
SFAS No. 123 will continue to apply the existing accounting rules contained
in Accounting Principles Board Opinion (APB) No. 25, but are required to
provide proforma disclosures of the compensation expense determined under the
fair-value provisions of SFAS No. 123.  APB No. 25 requires no recognition of
compensation expense for most of the stock-based compensation arrangements
provided by the Company, namely, broad-based employee stock purchase plans and
option grants where the exercise price is equal to the market price at the date
of the grant.

LONG-LIVED ASSETS

In March 1995, the FASB issued SFAS No. 121, "Accounting for the Impairment of
Long-lived Assets and for Long-lived Assets to Be Disposed Of," which requires
impairment losses to be recorded on long-lived assets used in operations when
indicators of the impairment are present and the undiscounted cash flows
estimated to be generated by those assets are less than the assets' carrying
amount.  SFAS No. 121 also addresses the accounting for long-lived assets that
are expected to be disposed of.  No impairment of long-lived assets has been
recognized.

INCOME TAXES

The Company accounts for income taxes using the asset and liability method.
Under the asset and liability method, deferred income taxes are recognized for
the tax consequences of "temporary differences" by applying enacted statutory
tax rates applicable to future years to differences between the financial
statement carrying amounts and the tax bases of existing assets and
liabilities.  Deferred tax assets are reduced by a valuation allowance when,
in the opinion of management, it is more likely than not that some portion or
all of the deferred tax assets will not be realized.


                                     F-6
===============================================================================
<PAGE>
                              BOYSTOYS.COM, INC.

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF JUNE 30, 2002


NOTE 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 and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

BASIC LOSS PER SHARE

In February 1997, the FASB issued SFAS No. 128, "Earnings Per Share", which
specifies the computation, presentation and disclosure requirements for
earnings (loss) per share for entities with publicly held common stock.
SFAS No. 128 supersedes the provisions of APB No. 15, and requires the
presentation of basic earnings (loss) per share and diluted earnings (loss)
per share.  The Company has adopted the provisions of SFAS No. 128 effective
December 6, 1993 (inception).

Basic net loss per share excludes dilution and is computed by dividing net loss
by the weighted average number of common shares outstanding during the reported
periods.  Diluted net loss per share reflects the potential dilution that could
occur if a stock option and other commitments to issue common stock were
exercised. Stock options issued to an officer in 1999 have been excluded from
the weighted average share computation.  This is consistent with accounting
principles because during 1999 the average market price of the shares was not
greater than the exercise stock option price and was therefore anti-dilutive.

INVENTORIES

Inventories include food, wine, liquor and other restaurant related items.  All
inventory items are stated at the lower of cost (first-in, first-out) or market
value.


NOTE 3 - PROPERTY AND EQUIPMENT

Property and equipment as of June 30, 2002, consists of the following:

          Equipment and fixtures               $    359,189
          Leasehold improvements:
               Capitalized construction costs     2,952,642
               Capitalized interest                 284,496
          Silverware/china     1,887
          Less: accumulated depreciation         (1,335,437)
                                               ------------
               Total property and equipment    $  2,262,777
                                               ============


                                     F-7
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<PAGE>
                              BOYSTOYS.COM, INC.

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF JUNE 30, 2002


NOTE 4 - NOTE RECEIVABLE - OFFICER

A note receivable in the amount of  $32,738 is due from an officer of the
Company as of June 30, 2002.  This note bears interest at 5.85% and is due
upon demand.


NOTE 5 - INCOME TAXES

Provision for income taxes is summarized as follows:

                                    For the Six Months Ended
                                          June 30, 2002
                                    ------------------------
          Current income taxes               $   800
          Deferred income taxes               - 0 -
                                             -------
          Provision for income taxes         $   800
                                             =======

Deferred income taxes reflect the next tax effects of temporary differences
between the carrying amount of assets and liabilities for reporting and the
amounts used for income tax purposes.  The tax effects of items comprising the
Company's net deferred tax assets are as follows:

                                         For the Six Months Ended
                                               June 30, 2002
                                         ------------------------
     Deferred tax assets:
     Net operating loss carryforwards          $   1,900,000
     Other                                            - 0 -
                                               -------------
     Gross deferred tax assets                     1,900,000
     Valuation allowance                          (1,900,000)
                                               -------------
     Net deferred tax assets                   $      - 0 -
                                               =============

As of June 30, 2002, the Company has net operating loss carryforwards for both
federal and state income tax purposes of approximately $6,300,000, which expire
through 2021.  Under federal and state laws, the availability of the Company's
net operating loss carryforward may be limited if a cumulative change in
ownership of more than 50% occurs within any three year period.


                                     F-8
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<PAGE>
                              BOYSTOYS.COM, INC.

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF JUNE 30, 2002


NOTE 6 - NOTES PAYABLE

Notes payable as of June 30, 2002, consist of the following:

Secured promissory notes with issuance dates
ranging from September 1995 to May 2000 and
with interest rates ranging from 8% to 12% per
annum.  The notes are due at the earlier of one
year after the date of the note or 60 days after
the Company's common stock is traded on any
securities exchange or in any over-the-counter
market.  The notes and accrued interest thereon
are secured by Company common stock and note
holders have the option to convert their debt into
common stock.  These notes were not paid at their
maturity dated and are due upon demand.  Rates
for conversion vary from $.40 to $1 per share.             $     403,440

Unsecured convertible promissory note which is
not to exceed $1,500,000 Interest accrues at 12%
per year, payable quarterly.  Conversion can be
exercised at maturity ( upon demand ) at a price
of $ 0.40 per share.                                           1,114,671

Unsecured convertible promissory of $300,000
dated December 3, 1999 with a maturity date of
December 1, 2000, and accrues interest at 12%
per annum.  Conversion can be exercised at
Maturity at a price of $ 0.36 per share.                         300,000

Unsecured convertible promissory of $100,000
dated January 10, 2000 with a maturity date of
December 1, 2000, and accrues interest at 10%
Per annum.  Conversion can be exercised at
maturity at a price of $ 0.25 per share     .                     - 0 -
                                                           -------------

TOTALS                                                     $   1,818,111
                                                           =============


                                     F-9
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<PAGE>
                              BOYSTOYS.COM, INC.

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF JUNE 30, 2002


NOTE 6 - NOTES PAYABLE (Continued)

Accrued interest related to notes payable totaled $193,860 as of June 30, 2002.
During 2000 notes payable of $650,000 were converted into shares of common
stock.  The beneficial conversion feature of $631,086 was calculated by
multiplying the intrinsic value of the stock times the number of shares the
notes can be converted into.  The intrinsic value of a conversion feature is
based upon the difference between the fair market value of the stock and the
conversion price.  The Company filed for bankruptcy protection, as discussed
in Note 11, and this will have a significant effect on the notes payable.
Interest accruals ceased as of the filing date.  Also, the Company is
negotiating new terms for all of the outstanding notes payable through the
Bankruptcy Court.


NOTE 7 - COMMITMENTS AND CONTINGENCIES

In February 1995, the Company began leasing real property in San Francisco,
California, which will be used to open its first night club facility.
The operating lease is for a period of ten years with two renewal options,
each for an additional five years.  At June 30, 2002, minimum annual rental
commitments under this non-cancelable lease were as follows:

                  Year Ending
                  -----------
                     2002               155,500
                     2003               161,500
                     2004               167,500
                     2005               167,500


NOTE 8 - SHAREHOLDERS' EQUITY

STOCK OPTION PLANS

The Company has approved two stock option plans that become effective
January 1, 1994, an Incentive Stock Option Plan and a Non-qualified Stock
Option Plan.  Both plans are available to officers, directors and key
employees of the Company.  Each plan allows for the purchase of up to
500,000 shares of common stock of the Company.

During the year ended December 31, 1998, the Company issued 60,000 options to
a director under the non-qualified stock option plan.  During the year ended
December 31, 1999, 1,950,000 options were granted to officers of the Company as
a compensation award.  The options were immediately exercisable for $0.25 per
share and were granted at less than the quoted market price of the stock on
the date of grant.  The Company has elected to account for incentive grants
and grants under its Plan following APB No. 25 and related interpretations.
Accordingly, the Company recorded $30,000 and $3,042,000 as compensation
expense for the year ended December 31, 1998 and the year ended
December 31, 1999, respectively, with a corresponding credit to additional
paid in capital.  For the years ended December 31, 2001 and 2000 the Company
did not issue any additional stock compensation.


                                     F-10
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<PAGE>
                              BOYSTOYS.COM, INC.

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF JUNE 30, 2002


NOTE 9 - DEVELOPMENT STAGE COMPANY IN PRIOR YEARS

As required by SFAS 7 the Company deemed development stage company for all
prior years.  With the opening and operation of its first night club location
in January, 2000 the Company is no longer classified as a development stage
company.


NOTE 10 - BANKRUPTCY

On May 8, 2001 the Company filed a petition for relief under Chapter 11 of
the United States Bankruptcy Code.  The filing was in response to an
unexpected attempt by the landlord to terminate the Company's long-term lease
for the club in San Francisco.  The Company plans to emerge from this
proceeding with a workable plan to repay its major creditors, including the
landlord.  The Company is current in its monthly rent obligations, but the
landlord is also a short-term creditor with whom the Company was trying to
negotiate new payment terms. The Company has submited its reorganization plan
and is waiting for approval.  On September 21, 2001 Boystoys.Com, Inc.
subsidairy (RMA of San Francisco, Inc.) also filed a petition for relief under
Chapter 11 of the United States Bankruptcy Code.   The Company estimates that
it has incurred an estimated $430,000 in professional fees related to the
bankruptcy filing that have not been reflected in the books.  The Company will
record these expenses when they are approved by the Court.


                                     F-11
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<PAGE>

Item 2.  Management's Discussion and Analysis of Financial Condition
         and Results of Operations

     This report has been prepared pursuant to the rules and regulations of the
Securities and Exchange Commission.  Certain information normally included in
annual reports has been condensed or omitted pursuant to such rules and
regulations.  This report should be read in conjunction with the Company's
latest Annual Report on Form 10-KSB for year ended December 31, 2001, a copy
of which may be obtained by writing to BoysToys.com, Inc., 412 Broadway,
San Francisco, California 94133.

     On May 8, 2001, the Company filed a petition in Federal Bankruptcy Court
for the Northern District of California (the "Court").  In its petition, the
Company seeks to effect a reorganization in accordance with a plan to be
submitted to the Court.  The petition was filed in response to efforts by the
landlord (or owner of the real property at which the Company's Club is located)
to effect a three day demand notice seeking the Company's immediate payment of
$100,000 in payment of an outstanding lien on the real property.
Subsequently, on August 10, 2001, the Company paid the landlord the $100,000 in
full payment of the lien. As of the date of this Form 10-QSB, the Court has not
adopted any plan of reorganization or liquidation of the Company.  There can be
no assurance that the Court will make any determinations favorable to the
Company.  Moreover, there can be no assurance that if the Company is able to
avoid a liquidation, that the Court will adopt or approve any plan of
reorganization which would allow the Company's stockholders the right to retain
their interest in the Company or that the Company will retain any interest in
its current business, assets, or operations.  All of these matters are beyond
the Company's control.

COMPANY STRUCTURE

     BoysToys.com, Inc., a Delaware corporation (the "Company"),
was incorporated in the State of Delaware on April 21, 1997 under the name
Wagg Corp.

     In January 1998 the Company changed its name to Alternative Entertainment,
Inc. (the same name of a Nevada corporation (identified below as "AEI-Nevada")
previously established for the operation of the Company's business) and in
December 1998 the Company's name was changed to BoysToys.com, Inc.

THE COMPANY'S BUSINESS

     The Company, through its wholly-owned subsidiary, RMA of San Francisco,
Inc., a California corporation ("RMA") owns and operates an upscale gentlemen's
club in San Francisco, California (the "Club") under the name, "Boys Toys
Club."  The Company originally intended to operate the Club through Boys Toys
Cabaret Restaurants, Inc., a California corporation ("BTC Restaurants") that is
currently a dormant corporation with no operations or assets.  All assets and
operations of BTC Restaurants have been assigned to RMA.

     Alternative Entertainment, Inc., a Nevada corporation ("AEI-Nevada") of
which only RMA has any tangible assets or operations.


                                      14
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<PAGE>

INTERNET-RELATED MATTERS

     While the Company's name includes the ".com" moniker, this  reflected the
Company's original intention to pursue business activities involving the use
of the internet.  Currently, the Company has not had sufficient financial or
managerial resources to pursue or develop any significant internet related
business.  And while the Company did have an internet Web Site for the
Company's public and investor relations (namely, Boystoys.com) (the "Corporate
Web Site") and previously it had six other Web Sites that opened in October
1999 and which remained in development only, the Company has since terminated
these developmental Web Sites (the "Developmental Web Sites")

     Further, and subject to the Company's successful operation of its existing
Club and subject to the outcome of the Company's filing in federal Bankruptcy
Court for the Northern District of California, the Company may explore this
further.  However, given the challenges facing the Company in Bankruptcy Court,
this is very unlikely.

     Currently, the Company has not identified any acquisition candidates or
otherwise conducted any review or evaluation of any precise acquisition target
or related strategy.  Since the Company filed its petition in the United States
Bankruptcy Court on May 8, 2001, the Company has not had the resources to
explore or evaluate any acquisition strategies.

     Further given these continuing uncertainties and the fact that as of
August 15, 2002, the Court has not adopted any plan of reorganization or
liquidation of the Company, there can be no assurance that the Court will make
any determinations favorable to the Company.  Moreover, there can be no
assurance that if the Company is able to avoid a liquidation, that the Court
will adopt or approve any plan of reorganization which would allow the
Company's stockholders the right to retain their interest in the Company or
that the Company will retain any interest in its current business, assets, or
operations that it currently holds.  All of these matters are beyond the
Company's control.

     Under these circumstances, the Company has not retained and will likely
not have the financial and managerial resources to obtain independent
investment banking or similar advice in connection with any such acquisition
but will likely rely primarily upon evaluation made by its management.
In addition, in the event that the Company seeks to implement an acquisition
strategy, it is doubtful any such acquisition strategy could currently be
undertaken absent a successful resolution of all matters pending before the
United States Bankruptcy Court.

THE SAN FRANCISCO CLUB

     Construction of the 15,000 square foot Club was completed in October 1999
at which time the Company received its certificate of final completion.
The Company has secured an alcoholic beverage license, a cabaret license,
and all other licenses and permits required by the City and County of
San Francisco, California.  The Club opened on January 26, 2000 and has
remained in operation since that date.

     A subsidiary, Alternative Entertainment, Inc., a Nevada corporation ("AEI-
Nevada") was initially formed to engage in the business of developing, owning,
and operating upscale nightclubs providing exotic dance entertainment combined
with private membership men's clubs and contemporary-styled full service
restaurants and bars.  On January 15, 1998, 80% of the Company's Common Stock
was acquired by AEI-Nevada and the Company changed its name from Wagg Corp. to
Alternative Entertainment, Inc. On January 26, 1998, AEI-Nevada, as the
majority stockholder of the Company, effected a one for two reverse split of
the Company's common stock and approved an amendment to the Company's
Certificate of Incorporation to change the Company's name to Alternative
Entertainment, Inc. and to authorize the issuance of up to 8,000,000 shares of
Preferred Stock.  The Company has not issued any Preferred Stock and has no
Preferred Stock outstanding.


                                      15
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<PAGE>

     Following these actions and on January 28, 1998, AEI-Nevada's Board of
Directors voted to approve the exchange of one share of the Company's Common
Stock for each share of AEI-Nevada common stock outstanding.  This resulted in
AEI-Nevada becoming a subsidiary of the Company.  As a result, AEI-Nevada
became a wholly-owned subsidiary of the Company.  Subsequently and on
December 29, 1998, a majority of the Company's shareholders approved an
amendment to the Company's Certificate of Incorporation to change the Company's
name to BoysToys.com, Inc.

     The Company believes that the Club serves three distinct business segments
(a nightclub providing exotic dance entertainment, a full service restaurant
and bar and a private membership men's club) within the confines of a single
facility.  The business of the Company is conducted under the trade name,
trademark, and service mark of "Boys Toys."  Although the Company intends to
register its claim to these tradenames, the Company has not yet filed an
application with the U.S. Patent and Trademark office to register these names.

     The Club's revenues are generated from:

     1)   food and beverage sales;

     2)   Boardroom VIP membership sales;

     3)   nightclub admission (door) fees;

     4)   fees charged by the Company in connection with the use of credit
          cards by patrons to obtain cash equivalent items (i.e., the Company
          sells "Diamond Dollars" certificates (in multiples of $10 and $20
          amounts) to patrons of the Club such that each "Diamond Dollars"
          certificate may be used in lieu of cash or credit cards at the Club
          for a patron's payment of a "dance fee" to an entertainer) ("Cash
          Equivalent Fees");

     5)   sales of certain  merchandise on display at the Club (i.e., polo
          shirts, t-shirts, jackets, and caps) and other merchandise salable on
          a consignment basis; and

     6)   entertainers' lease fees paid by entertainers (dancers) for the
          privilege of performing at the Club. (Currently, the Company charges
          each entertainer a lease fee equal to $20 to $50 for the right to
          perform at the Club during any shift.)

     With respect to Cash Equivalent Fees, the Company charges a service fee
equal to 20% of the amount of any "Diamond Dollars" certificate that it sells
to any patron (i.e., if a patron seeks to purchase $100 in "Diamond Dollars"
certificates, the Company sells the certificates at a price equal to $120).
Each "Diamond Dollars" certificate may be used to pay "dance fees" to an
entertainer (as described above).  If an entertainer receives a "Diamond
Dollar" certificate in payment for a "dance fee," the entertainer is able to
exchange each "Diamond Dollars" certificate and receive cash from the Company.
The Company purchases each "Diamond Dollars" certificate from the entertainers
at a 10% discount (i.e., for every $100 in stated value in "Diamond Dollars"
certificates submitted for exchange and redemption, the Company pays $90 in
cash).

     As a result, the Company earns $20 upon the sale of every $100 in "Diamond
Dollars" certificates and, upon redemption of a $100 "Diamond Dollars"
certificate, the Company pays only $90 to the entertainer who redeems it.


                                      16
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<PAGE>

     The Company leases the land and building for the Club through its other
wholly-owned subsidiary, RMA of San Francisco, Inc., a California corporation
("RMA") (and as successor in interest to Boys Toys Caberet Restaurants, Inc.,
a California corporation).  The real property for the Club is owned by Roma
Cafe, Inc. ("RCI") and is located in San Francisco's financial district at
408-412 Broadway, San Francisco, California.

     If the Company is successful in operating the Club and if the Company is
able to obtain additional financing, the Company plans to establish additional
Boys Toys Clubs in other locations, including New York, Chicago, New Orleans
and Boston.  However, the Company has not identified any specific location in
any of these cities and these plans are subject to: (i) the successful
operation of its existing Club; (ii) the negotiation of acceptable terms for
the acquisition of an existing gentlemen's club in a location which would be
suitable and compatible with the Company's strategy; and (iii) the availability
of financing terms from a seller of a gentlemen's club that would permit the
Company to complete the acquisition on financial terms that are acceptable to
the Company in view of the Company's then existing financial abilities and the
costs that the Company would incur in expanding its currently limited
management staff and providing additional working capital to meet an expanded
level of operations.  The Company has not presently identified any prospective
acquisition candidate and there can be no assurance that the Company will
undertake any such acquisition or otherwise expand to other locations.

     If the Company were to establish other Boys Toys Clubs, it anticipates
that the Company would likely lease existing nightclub and/or restaurant
locations, acquire  related nightclub/restaurant properties and equipment,
and thereafter make all necessary improvements to such locations, properties
and equipment in order to conform them to the Boys Toys motif.

     The Boys Toys Club name, embraces a concept featuring exotic dance
entertainment performed by attractive and talented entertainers within an
upscale and trendy nightclub environment.  The Club has an interior setting
where patrons will be surrounded, and among, numerous and various material
items which many men aspire to obtain in their life.  The Company anticipates
that a patron of its Club will be quickly struck by the nature and number of
items on display, such as artwork, collectibles, unusual artifacts and
memorabilia. The Company currently has $80,000 of artwork on display in
the Club and consigned for sale pursuant to oral agreements with local
San Francisco-area artists.

     The Company has placed this artwork on display throughout the Club, each
such displayed item will be available for purchase by patrons, or the Company
is able to provide patrons with detailed information concerning how and where
such displayed item may be purchased.

     The Company expects that all items on display in the Club will be replaced
with new and different items approximately every 60 to 90 days, thereby giving
the Club a new interior physical appearance every two to three months.

     If the Company is successful, the Company further expects that the
exciting and vibrant atmosphere created by the Club's interior decor will be
enhanced by exhilarating lighting and specially selected upbeat music.  In
order to obtain the items to place on display in its Club, the Company approach
local and regional vendors of the items it desires to display, and enters into
consignment arrangements with each vendor.

     The Company has verbal consignment arrangements that allows the Company to
display various types of artwork, collectibles and memorabilia owned by the
vendors at each Club at no cost to the Company, while in return providing the
vendor with increased exposure to its owned items, and therefor providing the
vendor with potential additional marketing venues and outlets for the sale of
its owned items.  However, retail competition for the sale of such items is
intense and there are many other retail galleries and consignment outlets
likely will be able to attract high quality artwork and other items that the
Company seeks to display for consignment at its Club.  Thus, there can be no
assurance that the Company will attract high quality items on a consignment
basis or, if it does, that it can continue to do so.


                                      17
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<PAGE>

     Failure of the Company to obtain additional desired items in the future
and on a consignment basis may result in the Company being unable to embellish
the interior physical decor of its Club in its planned manner.  Further,
failure of the Company to obtain the desired items on a consignment basis will
have a material adverse impact on the Company's plan of operation in that such
failure may require the Company to expend significant amounts of its capital to
purchase such items.

     The Club has, in addition to its nightclub proper,  a full service
restaurant and bar and full service, private VIP members-only men's club.

     Rather than just establishing an exotic dance entertainment nightclub,
the Company's business concept for the Club is to create an entertainment
complex combining an exotic dance entertainment nightclub with a full service
restaurant and bar and a private VIP members-only men's club. The concept is
to provide a place where one may enjoy quality exotic dance entertainment,
relax and converse in a place where one may see and be seen, partake in quality
restaurant dining, and entertain and be entertained in private members-only
quarters, all within the Boardroom Restaurant.

     The Company believes that excellence in operations, ambiance and
location are important for success in the exotic dance entertainment business.
The Company believes that it will be able to differentiate its Boys Toys Club
by implementing the following strategic elements:

     *    Combining its exotic dance entertainment nightclubs with its
          Boys Toys Club and private VIP members-only men's clubs so as
          to provide patrons with a multi-faceted entertainment experience.

     *    Designing its Boys Toys Club to attract primarily upscale
          professionals and businessmen.

     *    Physically embellishing its Boys Toys concept by creating
          an exterior and interior physical decor for its Boys Toys Club
          which evidences the style and class of an establishment designed
          for men's entertainment and reflecting the upscale caliber of
          its patrons.

     *    Providing high quality and attentive service in a manner to
          ensure patron satisfaction.

     The Company believes that its Boys Toys concept will create a distinct
image and popularity among upscale gentlemen's club patrons.  As such, the
Company believes that it will be successful in marketing T-Shirts, jackets and
other casual-wear merchandise that feature the Boys Toys logo and location.
However, absolutely no assurance can be given that the Company's Boys Toys
concept will create a distinct image and widespread popularity, or that the
Company will be successful in marketing T-Shirts, jackets and other casual-wear
merchandise with the Boys Toys logo.


                                      18
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<PAGE>

     It is also the Company's philosophy and intention that the Boys Toys Club
exhibit civic and social responsibilities by creating and maintaining an active
relationship with a variety of charity organizations in their respective local
communities.

     In this regard, the Company expects to make contributions of food,
services or funds benefitting a wide range of causes, which causes management
of the Company expects to be brought to its attention through suggestions from
the Company's employees, officers and shareholders.

     The Company's Club restaurant provides all patrons of the Company's
Boys Toys Club with a full service restaurant, bar and lounge area providing
business lunch buffet and dinner table service by waitresses. The Company has
hired an experienced executive chef and other experienced support personnel and
believes that its menu represents the finest culinary delights, distinctive for
their taste as well as nutritional balance, from throughout the various regions
of the United States.

     Coupled with this distinctively American menu, the restaurants are
expected to offer the highest quality of food prepared with the greatest of
care and presented and served in a manner which would reflect the upscale
nature of the Boys Toys Club.  As a complement to its food menu, the Company
expects that its Boys Toys Restaurant will offer an extensive selection of
domestic and foreign wines, spirits, and champagne.  Management of the Company
anticipates that an average lunch check per customer will be $25.00 and an
average dinner check per customer will be $60.00.

     However, these amounts and the operation of the restaurant will be subject
to prevailing competitive conditions.

     In general, the Company believes that excellence in operations and quality
of food and service, ambiance, location and price-value relationship are keys
to success in the restaurant industry.  The Company believes that it will be
able to differentiate its Club by emphasizing the following strategic elements:

     *    Positioning in the mid-priced to upper-priced, full service
          dining segment of the restaurant industry.

     *    The location of the Club  within the confines of an exciting
          and upbeat facility provides a unique and enduring attraction
          to a broad and diverse demographic mix of customers in the
          25 to 65 age group.

     *    Quality and attentive service with each waitress generally
          being assigned to no more than four tables at lunch and
          three tables at dinner to ensure customer satisfaction.

     *    Consistent quality products through careful ingredient
          selection and food preparation.

     There can be no assurance that the Company can achieve any one or more of
these objectives or, if it does achieve these objectives, that it can achieve
them while also achieving and maintaining profitability.


                                      19
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<PAGE>

PRIVATE VIP MEMBERSHIP CLUB

     The Boys Toys Club has a full service private VIP membership facility is
open only to patrons who are members. These private VIP membership facilities
are known as the "Boardroom." Membership in the Boardroom entitle members to:
(i) access to the private VIP Boardroom; (ii) bring up to six guests to the
Boardroom without payment of any entrance fee (currently $30.00 per person);
(iii) preferred seating for dining; (iv) first priority for special events; and
(v) free limousine service within the city of San Francisco.  The Boardroom
also has a business center (with facsimile machines, secretarial staff and
computers).

     Additionally, Boardroom members have free use of Boardroom facilities for
private parties and meetings, preferred seating and advanced notices for
special events and holiday functions held at the Club, and access to personal
improvement seminars and concierge services. Currently Boardroom memberships
are for a period of one year, and may be renewed by a member at the end of each
membership year. Membership fees for the Boardroom are $1,000 per annum.

LOCATION OF BOYS TOYS CLUB

     The Company's existing Club is located at 408-412 Broadway, San Francisco,
California, in the north beach area of the financial district of San Francisco
(the "Facility"), approximately four blocks north of the landmark Transamerica
Building.

     The Company leased the Facility from Roma Cafe, Inc.  The Company has
obtained a Place of Entertainment Permit with respect to the exotic dance
entertainment aspects of the Company's business at the San Francisco Premises.

ADDITIONAL BOYS TOYS CABARET CLUBS.

     In addition to the existing Club and if the Company can obtain additional
financing on favorable terms and subject to the outcome of the Company's filing
in federal Bankruptcy Court for the Northern District of California, the
Company may establish other Boys Toys Clubs.  The exact number, location, and
other aspects of this plan has not been determined at this time.

     Additional locations that may be considered for Boys Toys Clubs include
New York, Chicago, New Orleans and Boston.  However, the Company has not
identified any specific location in any of these cities and these plans are
subject to: (i) the successful operation of the existing Club; (ii) the
negotiation of acceptable terms for the acquisition of an existing gentlemen's
club in a location which would be suitable and compatible with the Company's
strategy; and (iii) the availability of financing terms from a seller of a
gentlemen's club that would permit the Company to complete the acquisition on
financial terms that are acceptable to the Company in view of the Company's
then existing financial abilities and the costs that the Company would incur
in expanding its currently limited management staff and providing additional
working capital to meet an expanded level of operations.  The Company has not
presently identified any prospective acquisition or location and there can be
no assurance that the Company will undertake any such acquisition or otherwise
expand to other locations.

MARKETING

     The Club (and any other clubs that the Company may establish), is marketed
to attract primarily (if not strictly) professional and white collar
businessmen clientele.

     The Company uses the Club's name to develop name recognition and patron
loyalty to attract these customers.  Due to its upscale theme, exotic dance
entertainment experience and quality food and service, the Company believes
that its Boys Toy Clubs has the unique ability to attract both local and out-
of-town professional and white collar businessmen patronage.


                                      20
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<PAGE>

     The tour and travel segment as well as convention segments have been
another focus of the Company's marketing strategy. The Company's marketing
strategy is designed to inform targeted patrons that Boys Toys Clubs provide
a unique and exciting atmosphere not found elsewhere through visual and audio
experiences.

     The center of the Company's marketing efforts revolves around its exotic
dance entertainment nightclubs. The Company's Boys Toys concept is directed at
upscale, professionals and white collar businessmen aged 25-65 who either
reside in or near major U.S. commercial center its Club is located or who
frequently visit these areas on business.

     The Company's local patrons are primarily men and women who work and/or
live near a Boys Toys Club, and who will seek some form of nightclub
environment at the end of their work day which will provide a comfortable
atmosphere with appropriately priced, high quality, food available. The Company
has found that 30-40% of its clientele are women.

     The Company believes it meets this patron segment's needs by providing a
quality entertainment experience with a high level of personalized service in a
casual, fun setting - an experience that the Company expects will generate
repeat visits among the local customer segment.

     The Company believes that the business travel segment is primarily
composed of individuals traveling on business where the Club is located. The
Company further believes that the marketing approach for this customer requires
an emphasis on the beauty and elegance of the Boys Toys Clubs, the exciting
atmosphere, and safety.

     The Company promotes and advertises its Boys Toys Restaurant and private
VIP members-only men's club segments of its Boys Toys Clubs as if they were not
dependent upon its exotic dance entertainment segment. Thus, the Company
strongly promotes its Boys Toys Restaurants as an establishment providing the
best food possible at reasonable prices. The Company promotes its private VIP
members-only men's club as a private location where men can meet to, among
other things, discuss and effectuate business in a congenial atmosphere, as
well as a place where men can entertain themselves as well as business clients
and associates.

     The Company is utilizing billboard, print and direct mail advertising,
and is conducting coordinated promotional efforts with local and regional
hotels, taxi companies and limousine services.

     Additionally, the Company intends to utilize merchandise as a means of
marketing its Boys Toys Clubs. Thus, the Company will promote various Boys Toys
merchandise which is expected to be created by the Company as popularity of the
Club increases. Such merchandise is expected to include T-Shirts, jackets,
sweatshirts, and other memorabilia.

     Because of its Boys Toys Restaurants, and if the Company can maintain the
presence and availability of many interesting items displayed prominently
throughout the Club, the Company believes that its Club will be able to adopt
event-driven promotion oriented marketing strategies. Thus, in addition to
traditional advertising techniques, the Company establishes close ties with the
entertainment industry so as to provide the Company with extensive promotional
opportunities.


                                      21
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<PAGE>

     Events such as surprise appearances by recording artists or professional
athletes can be expected to attract targeted upscale patrons.

BOYS TOYS CLUB OPERATIONS AND MANAGEMENT

     The Company strives to maintain quality and consistency in its existing
Club through the careful training and supervision of personnel and the
establishment of standards relating to food and beverage preparation,
maintenance of facilities and conduct of personnel.

     The Company maintains financial and accounting controls for the existing
Club through the use of centralized accounting and management information
systems. Operations information will be collected weekly from the Club, and
club managers will be provided with weekly and 28-day period operating
statements for their locations. Cash will be controlled through daily deposits
of sales proceeds in local operating accounts. The Club is scheduled to be open
daily from 11:00 a.m. to 2:00 a.m.

     Overall management of a typical Boys Toys Cabaret Club is conducted by two
managers, a day manager and an evening manager in addition the Club's General
Manager.   The Club also employs a staff consisting of approximately 40 hourly
employees and 35 part-time employees.

     The additional 35 part-time employees are primarily restaurant servers,
bus persons, and support personnel.

     In addition to these employees, the Company utilizes 25 to 50 female
exotic entertainers (dancers) per night, as independent contractors, on a
varying basis.  Each exotic female entertainer is paid directly by a patron for
each dance performed.  The Company does not employ or pay any wages, salary,
compensation, or other fees to any of the exotic female entertainers that
perform at the Club.  Entertainers also pay a lease fee of $20 to $50 per shift
for the right to perform at the Club.  Entertainers receive only  "dance fees"
from patrons of the Club.  The Company does not receive any percentage from any
cash fees paid by patrons to the entertainers (dancers) that perform at the
Club.

     However and as described earlier, when an entertainer redeems any "Diamond
Dollars" certificates (previously received from a patron in payment of any
"dance fees"), the Company pays the entertainer an amount equal to 90% of the
face or stated value of the "Diamond Dollars" certificates that are later
submitted for redemption. (Thus, if an entertainer submits $1,000 in "Diamond
Dollars" certificates to the Company, the Company redeems these certificates by
paying the entertainer $900 in cash.)

     The General Manager of the Club reports directly to the Company's
President.  The Company's Entertainment Director and Club Manager report to the
General Manager of the Club.  Working in concert with these managers, the
Company's President defines operating and performance objectives for the Club
and monitors implementation. The Company expects that its Club managers will
participate in a variety of Company sponsored employee incentive programs such
as the Company's stock option plans.  The Company has not yet adopted any stock
plan but may do so in the future.


                                      22
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<PAGE>

     Awards under any Company sponsored employee incentive programs will be
tied to achievement by facility managers of specified operating targets.
The Company plans for its senior management to regularly visit each Club the
Company operates and meet with the respective managers of those clubs to ensure
that the Company's strategies and standards of quality in all respects of
operations and personnel development are met.

     The Company believes that customer service and satisfaction are keys to
the success of its existing Club and any other clubs that the Company may
establish. The Company's commitment to customer service and satisfaction will
be evidenced by several Company practices and policies, including periodic
visits by managers to customers' tables, active involvement of management in
responding to customer comments and assigning waitresses in the Company's Boys
Toys Restaurants to a limited number of tables, generally four for lunch and
three for dinner.

PURCHASING

     The Company negotiates directly with suppliers for food and beverage
products to ensure consistent quality and freshness of products and to obtain
competitive prices. The Company purchases substantially all food and beverage
products from authorized local or national suppliers. Food, beverage and other
products and supplies are shipped directly to the Club, although invoices for
purchases will be paid by the Company's wholly-owned subsidiary, RMA of San
Francisco, Inc., a California corporation ("RMA").  RMA is the corporation the
Company established to operate the existing Club.

MANAGEMENT INFORMATION SYSTEMS

     The Company has a computer information system which is designed to
maintain personal profile information on the members of its private VIP
members-only men's club. The profiles are designed to assist managers of the
Club in meeting the personal desires of particular Boardroom members, and will
contain such information as a Boardroom member's favorite beverage, favorite
food and spending habits. This information will be available to any other Club
locations that the Company may establish through a proprietary database, and
will enable Boardroom members to visit any of the Company's Clubs (that the
Company may establish) and be provided with a similar level of personal
service.

     The Company's point-of-sale information system is designed to assist in
labor scheduling and food cost management, provide corporate management quicker
access to financial data and reduce a particular club manager's administrative
time.

TRADE NAMES, TRADEMARKS AND SERVICE MARKS

     The Company expects to develop and implement Boys Toys trademarks and/or
service marks which will enhance a customer's ability to identify the Company,
as well as the products and services to be offered by the Company.

     Currently, the Company has not developed and implemented any trademarks
and/or service marks, and therefore has not filed any applications to register
any trademarks and/or service marks. Furthermore, the Company is unaware of
names similar to the trade names to be used by the Company which are used by
other persons.

     The Company's overall policy is to pursue registration of its marks
whenever possible and to oppose vigorously any infringement of its marks. There
can be no assurance that if and when the Company develops and implements its
trademarks and/or service marks, that such trademarks and/or service marks will
afford protection against competitors with similar products and services. There
can also be no assurance that the Company's trademarks and/or service marks
will not be infringed upon or designed around by others, or that the Company
can adequately prosecute or defend any infringements.


                                      23
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<PAGE>

COMPETITION

     The Company's existing Club (and any other clubs that the Company may
later establish) will compete with other nightclubs, restaurants and bars, some
of which may be larger and more established, experienced and better financed
than the Company.

     Competing nightclubs, restaurants and bars may offer services not offered
by the Club, which could place the Company at a competitive disadvantage.

     The Company believes that the following factors will allow the Company to
compete effectively:

     *    Many of the Company's competitors are not designed to market
          themselves as high quality, upscale exotic dance entertainment
          complexes and have not attempted to do so.

     *    The Company's marketing strategy focuses on creating a reputation
          for its Clubs as an upscale, tasteful nightclub, restaurant, and bar
          facility frequented by professionals and white collar businessmen.

     *    The Company's three-pronged approach of having its Clubs produce
          revenues from food and beverage sales, Boardroom membership fees
          and exotic dance nightclub associated fees are anticipated to enhance
          the profitability of the Company.

     The adult entertainment industry, including adult entertainment offered
in private clubs and through the internet, is large and includes many well-
established and well-managed and experienced enterprises.

     Many of these businesses possess financial and managerial skills that far
exceed the resources that the Company has or will have at any time in the
foreseeable future.  Some of the larger operators have multiple locations
within a metropolitan area and effectively utilize their advertising and
marketing budgets to gain greater market share while achieving economies of
scale to lower certain fixed costs per unit and per retail location.

     In addition, many of these established operators have developed marketing,
real estate, zoning, and licensing management skills that the Company is not
likely to possess at any time in the near future.

     While the Company believes that its Club is unique and will offer and
attract an "upscale" clientele, there can be no assurance that the Company will
be successful or, if the Company achieves any success, that other competitors
will not imitate and duplicate the Company's planned business with the result
that the Company will not gain any significant long-term advantage.

     The retail market for locally-produced and owned artwork, memorabilia, and
other items that may be displayed at the Company's Club on a consignment basis
is characterized by intense competition.  Further, while the Company currently
has obtained such items and has them on display at its existing Club under oral
arrangements with the owners of the consigned items (such that the Company is
to receive 20% of the proceeds from the sale of any such consigned item), there
can be no assurance that the Company can attract suitable artwork and
memorabilia on a consignment basis or, if it is able to do so, that any such
items can be sold.


                                      24
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<PAGE>

REGULATORY ASPECTS

     On May 8, 2001, the Company filed a petition in Federal Bankruptcy Court
for the Northern District of California (the "Court").  In its petition, the
Company seeks to effect a reorganization in accordance with a plan to be
submitted to the Court.  The petition was filed in response to efforts by the
landlord (or owner of the real property at which the Company's Club is located)
to effect a three day demand notice seeking the Company's immediate payment of
$100,000 in payment of an outstanding lien on the real property.
Subsequently, on August 10, 2001, the Company paid the landlord the $100,000 in
full payment of the lien. As of the date of this Form 10-QSB, the Court has not
determined whether the Company is to be liquidated or if, as an alternative, a
plan of reorganization can be adopted.  In either event and given the actions
taken by certain creditors who are strongly opposed to the Company and the
interests of the Company's stockholders, there can be no assurance that if the
Company is able to avoid a liquidation, that the Court will adopt or approve
any plan of reorganization which would allow the Company's stockholders the
right to retain their interest in the Company or that the Company will retain
any interest in its current business, assets, or operations.  All of these
matters are beyond the Company's control.

     There can be no assurance that the Court will make any determinations
favorable to the Company.

     The ownership and operation of restaurants, bars and exotic dance
nightclub businesses are generally subject to extensive state and local
regulation, and the Company, any subsidiaries it may form and various of their
respective officers and employees will be subject to such regulations.

     Currently, the Company has not experienced any problems with any of their
business, liquor, or other licenses or permits from any governmental agencies
except that on April 5, 2000, the Company was forced to appear before the San
Francisco Planning Board of Appeals (the "Appeals Board") to respond to efforts
made by the Telegraph Hill Dwellers Association (a local neighborhood group)
("THDA").  THDA sought to repeal the planning permit previously issued to the
Company by the City of San Francisco Planning Department for the operation of
the Company's Club.  In a 3-2 vote, in favor of the Company, the Appeals Board
re-affirmed the Company's prior issuance of the Permit.

     While the Company has obtained all necessary licenses and permits needed
to open its Club, the Company will need to renew licenses and permits from
various governmental agencies including, without limitation, applicable zoning,
land use, environmental and building permits.

     The federal Americans with Disabilities Act prohibits discrimination on
the basis of disability in public accommodations and employment. The Company's
Boys Toys Cabaret Club is designed to be accessible to the disabled, and will
comply with all current applicable regulations relating to accommodating the
needs of the disabled.  There can be no assurance that the Company will
maintain its licenses or permits or that they will always be obtained or
renewed in a timely manner. The failure to obtain any such permits or licenses
could adversely affect the Company.

     Further, the Club is subject to numerous federal, state and local laws
affecting health, sanitation and safety standards, as well as to state and
local licensing related to the sale of alcoholic beverages.  The Company has
secured all appropriate licenses from regulatory authorities allowing it to
sell liquor, beer and wine, champagne, and a food service license from
San Francisco, California health authorities.


                                      25
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<PAGE>

     Management of the Company believes that the Company's licenses to sell
alcoholic beverages will in all likelihood require that they be renewed
annually and may be suspended or revoked at any time for cause, including
violation by the Company or its employees of any law or regulation pertaining
to alcoholic beverage control, such as those regulating the minimum age of
patrons or employees, advertising, wholesale purchasing and inventory control.

     The failure of the Company's Club (and any other clubs that the Company
may acquire or establish) to retain liquor or food service licenses could have
a material adverse effect on its operations. In order to reduce this risk, the
Company intends to develop and implement at its Club standardized procedures
designed to assure compliance with all applicable codes and regulations.

     The Company may be subject in certain states to "dram-shop" statutes
which generally provide a person injured by an intoxicated person the right
to recover damages from an establishment that wrongfully served alcoholic
beverages to the intoxicated person. The Company carries liquor liability
coverage as part of its comprehensive general liability insurance.

     The Club is also subject to federal and state minimum wage laws governing
such matters as working conditions, overtime and tip credits and other employee
matters. The Company expects that significant numbers of the Company's food and
beverage service and preparation personnel will be paid at rates related to the
federal minimum wage and, accordingly, further increases in the minimum wage
could increase the Company's labor costs.

     Finally, the Company believes that since its operations involve "exotic
female entertainment," the Company may be subject to continuing social,
political, and other institutional pressures from organizations, women's
groups, and others who believe that the Company's business is inimical to
social progress and the rights of women.   These groups frequently seek to have
city ordinances and other laws enacted which adversely impact the continued
operation of the Company's business or deny the Company the ability to renew
needed licenses or permits.

     As a result, many companies that offer adult entertainment similar to the
Company's business expend substantial sums in legal fees and costs to prevent
or at least delay changes to city zoning ordinances, state laws relating to
adult entertainment, and other similar regulations.

     To the extent that these organizations and groups are able to organize and
obtain recognition by certain governmental bodies that license or allow the
Company to operate its business, the Company would likely suffer additional
costs, expenses, and losses whose magnitude can not be foreseen.

     The Company also anticipates that it will also expend substantial sums in
legal fees in connection with defending its licenses and any other operating,
use, or occupancy licenses it requires to operate its Club.  If the Company
later acquires and operates any other gentlemen's clubs at any other location,
it will likely incur significant similar expenses for any such other location
as well.  These costs will likely arise since there are significant segments of
our society that believe that the Company's business will inhibit the social
progress, rights, and dignity of women and the efforts undertaken by these
segments to restrict or inhibit the Company and its business.  The magnitude of
these costs and expenses is expected to be significant.


                                      26
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<PAGE>

Item 2.  Management's Discussion and Analysis of Financial Condition
         and Results of Operations

     During the three months ending June 30, 2002 ("Second Quarter 2002"),
the Company recorded $567,225 in Sales Revenues compared to $638,670 in Sales
Revenues during the three months ending June 30, 2001 ("Second Quarter 2001").

     Sales Revenues for the Second Quarter 2002 decreased by 11.19% from Second
Quarter 2001 (although Sales Revenues did not decrease below the amount that
the Company had for the comparable period during 2000).  The Company believes
that the decline was due to the comparatively lower level of overall economic
activity in the San Francisco area during 2002 compared to 2001.

     All of the Company's revenues were derived solely from the Company's Club.
After deducting $79,927 in Cost of Sales, the Company recorded a Gross Profit
of $487,298 for the Second Quarter 2002.  This compares to $94,462 in Cost of
Sales during the Second Quarter 2001 when the Company recorded $544,208 in
Gross Profit during the Second Quarter 2001.  Cost of Sales is primarily made
up of food, liquor, and other miscellaneous expenses related to the Company's
sale of food and beverages at the Club.  This represented a decrease in Gross
Profit of $56,910 or 10.46% from Gross Profit from Second Quarter 2001 to
Second Quarter 2002. The Company believes that the decline in Gross Profit was
primarily due to the lower operating level of the Company compared in Second
Quarter 2002 to Second Quarter 2001 and the continuing effects of the events
that occurred on September 11, 2001.

     The $487,298 in Gross Profit in Second Quarter 2002 represents an 85.91%
Gross Profit Margin for Second Quarter 2002.  This compares to $544,208 in
Second Quarter 2001 which represented an 85.21% Gross Profit Margin (before
deduction, in each case, of other operating and non-operating expenses) during
their respective periods.  (This compares to a 79.70% Gross Profit Margin
achieved during Second Quarter 2000.)

     However, during the Second Quarter 2002, the Company recorded $461,239 in
General and Administrative Expenses compared to Second Quarter 2001 when the
Company recorded $571,375 in General and Administrative Expenses.  These
expenses related both to the operation of the Company and to the operation of
the Club.  These expenses are primarily wages, salaries, depreciation and other
expenses incurred for management, administrative, marketing, promotion,
accounting, legal, and other similar expenses.  This represented a 19.28%
decrease from the amount the Company incurred as General and Administrative
Expenses during the Second Quarter 2001.

     In addition, during the Second Quarter 2002, the Company recorded $97,970
in Depreciation and Amortization expenses compared to $0 Depreciation and
Amortization expenses during Second Quarter 2001.

     As a result, during the Second Quarter 2002, the Company recorded an
Operating Loss of $71,911 during the Second Quarter 2002 compared to $27,167
during Second Quarter 2001.

     However, during the Second Quarter 2002 the Company recorded $472 in
Interest Income compared to $0 in Interest Income during the Second Quarter
2001.   The Company also recorded no Interest Expense in the Second Quarter
2002 compared to $17,157 in Interest Expense during Second Quarter 2001.  The
Interest Expense represents amounts incurred on notes payable during the Second
Quarter 2001.


                                      27
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<PAGE>

     When these amounts are added to the Operating Losses the Company incurred
during the period, the Company recorded a Net Loss of $71,439 during the Second
Quarter 2002 compared to a Net Loss of $44,324 during the Second Quarter 2001.

     Therefore, the Company recorded a Net Loss Per Share of $0.01 during the
Second Quarter 2002  compared to a Net Loss Per Share of $0.00 during the
Second Quarter 2001.

SIX MONTH PERIODS ENDED JUNE 30, 2002 AND JUNE 30, 2001

     During the six months ending June 30, 2002 (the "First Six Months of
2001"), the Company recorded Sales revenues of $1,190,209 compared to
$1,256,536 in  Sales revenues during the six months ending June 30, 2001 (the
"First Six Months of 2001").  All of the Company's revenues during this period
were derived from its Club.

     Cost of Sales for the First Six Months of 2002 were $175,196 or
approximately 14.72% of the Company's Sales revenues during this period.
This compares to Cost of Sales of $189,559 for the First Six Months of 2001
which were approximately 15.09% of the Company's Sales revenues.  Cost of Sales
is primarily composed of food, liquor, and other miscellaneous expenses related
to the Company's sale of food and beverages at the Club.

     The Company's Gross Profit during the First Six Months of 2002 was
$1,015,013 which compares to the First Six Months of 2001 when Gross Profit
was $1,066,977.  Thus, during the First Six Months of 2002, the Company's
Gross Profit declined by about 4.87% from the same period in 2001. The Company
believes that the decline was due in part to lower volumes associated with
the general economic weakness of the San Francisco economy, the effects of
the events of September 11, 2001 on business and convention activities in
San Francisco, and the indirect effects of the Company's bankruptcy filing.

     General and Administrative Expenses during the First Six Months of 2002,
primarily made up of wages, salaries, depreciation, and other expenses incurred
for management, administrative, marketing, promotion, accounting, legal, and
other similar expenses, totaled $1,172,644 compared to First Six Months of 2001
when these expenses totaled $1,104,943.  Thus, General and Administrative
Expenses equaled approximately 88% of the Company's Sales revenues of
$1,190,209 during the First Six Months of 2002.  This compares to the First Six
Months of 2001 when the Company recorded Sales revenues of $1,256,536 and Total
General and Administrative Expenses of $1,104,943.  The Company's Total General
and Administrative Expenses increased as a result of $195,881 in Depreciation
and Amortization Expenses recorded during the First Six Months of 2002 compared
to $0 in Depreciation and Amortization Expenses recorded during the First Six
Months of 2001.   Without these Depreciation and Amortization Expenses in 2002,
the Company would have recorded an Operating Profit of $38,250.   Throughout
2001 and 2002, the Company has continued to stress efficiencies in labor
scheduling and improvements in operations management to gain stronger control
of the Company's costs.

     In addition, since the Company filed for protection under federal
bankruptcy laws on May 8, 2001, the Company will continue to face uncertainties
that are beyond its control. (See "Factors That May Impact Future Results"
elsewhere in this Form 10-QSB.)

     As a result, the Company recorded a Net Loss of $156,694 during the First
Six Months of 2002 compared to a Newt Loss of $120,862 during the First Six
Months of 2001.  And, the Company recorded a Net Loss Per Share of $0.02 during
the First Six Months of 2002 compared to a Net Loss Per Share of $0.00 during
the First Six Months of 2001.


                                      28
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<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

     There are several components which affect the Company's ability to meet
its financial needs, including funds generated from operations, capital
expenditures, short-term borrowing capacity and the ability to obtain long-term
capital on reasonable terms.

     On June 30, 2002, the Company had Total Current Assets of $146,475 and
Total Current Liabilities of $2,248,425.  This compares to December 31, 2001
when the Company had Total Current Assets of $172,243 and Total Current
Liabilities of $2,300,882.

     Thus, in relative terms, the Company had about six and one-half cents in
Total Current Assets for each one dollar in Total Current Liabilities as of
June 30, 2002 (versus less than seven and one-half cents in Total Current
Assets per dollar of Total Current Liabilities as of December 31, 2001).  As a
result, in relative terms, the Company has had a decrease in its liquidity from
December 31, 2001 to June 30, 2002.

     And, while $1,818,111 of the Company's $2,248,425 in Total Current
Liabilities on June 30, 2002 represented notes payable that were convertible
into the Company's common stock, the Company's aggregate Total Current
Liabilities of $2,248,425 on June 30, 2002 decreased by $52,457 from that shown
as of December 31, 2001.

     The Company has been dependent upon its ability to obtain capital by
issuing convertible promissory notes on a private placement basis.  The Company
does not have and does not anticipate receiving any commitments from any
underwriter or venture capital fund to assist it in meeting its current
financial obligations.

     On May 8, 2001, the Company filed a petition in Federal Bankruptcy Court
for the Northern District of California (the "Court").  In its petition, the
Company seeks to effect a reorganization in accordance with a plan to be
submitted to the Court.  The petition was filed in response to efforts by the
landlord (or owner of the real property at which the Company's Club is located)
to effect a three day demand notice seeking the Company's immediate payment of
$100,000 in payment of an outstanding lien on the real property.
Subsequently, on August 10, 2001, the Company paid the landlord the $100,000 in
full payment of the lien. As of August 15, 2002, the Court has not made a
determination as to any plan of reorganization or liquidation.  There can be no
assurance that the Court will make any determinations favorable to the Company.

     The Company's current financial condition and the protracted adversarial
legal actions taken by certain of the Company's creditors have served to create
additional difficulties and uncertainties for the Company and the resolution
of the Company's bankruptcy filing in the U.S. Bankruptcy Court for the
Northern District of California.

     There can be no assurance that the Company will not be forced into a
liquidation or, alternatively, that the Company will not be required to enter
into a plan of reorganization that will result in the total loss of the
Company's existing business and assets with the result that all investors who
hold shares of the Company's common stock will lose all of their investment.


                                      29
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<PAGE>

Item 2a.  Factors that May Affect Future Results

     The Company's business organization and existing debt and obligations on
its balance sheet all involve elements of substantial risk.  In many instances,
these risks arise from factors over which the Company will have little or no
control.  Some adverse events may be more likely than others and the
consequence of some adverse events may be greater than others.  No attempt has
been made to rank risks in the order of their likelihood or potential harm.
In addition to those general risks enumerated elsewhere, any purchaser of the
Company's Common Stock should also consider the following factors.

     The Company's business organization and existing debt and obligations on
its balance sheet all involve elements of substantial risk.  Further, since the
Company filed a petition in U.S. Bankruptcy Court for the Northern District of
California, the Company faces continued uncertainties which will impact its
ability to survive as a business.  The Company may be forced to liquidate all
of its assets or adopt a plan of reorganization that will result in investors
who hold the Company's common stock incurring a total loss of their investment.
In this context, these risks arise from factors over which the Company will
have little or no control.  Some adverse events may be more likely than others
and the consequence of some adverse events may be greater than others.  No
attempt has been made to rank risks in the order of their likelihood or
potential harm.  In addition to those general risks enumerated elsewhere, any
purchaser of the Company's Common Stock should also consider the following
factors.

1.   CONTINUED OPERATING LOSSES.  The Company incurred significant losses
during the twelve months ending December 31, 2001 and losses during the six
months ending June 30, 2002.  There is no assurance that the Company's
operations will be successful or that it will be profitable in the future.

2.   IMPACT OF BANKRUPTCY FILING & CONTINUING UNCERTAINTY.  On May 8, 2001,
the Company's management filed a petition in the U.S. Bankruptcy Court for the
Northern District of California.  The bankruptcy filing was sought to protect
the Company from the actions of a holder of a lien on the building and the
actions of the owner of the real property leased by the Company for the
operation of its Club.  While the Company hopes that it will emerge from U.S.
Bankruptcy Court with its operations intact, there can be no assurance that the
Company will not incur significant and protracted costs and resulting financial
difficulties as a result of the bankruptcy filing. The Company also anticipates
that it will incur significant legal fees and costs as a result of the action
it has taken in seeking the protection of the bankruptcy laws. There can be no
assurance that the Company will successfully resolve these or any other issues
that may arise in U.S. Bankruptcy Court or that the Company will do so without
substantial dilution and loss to the Company's current stockholders.  The
Company's shareholders may well lose all ofr their investment with no hope of
any recovery as a result or if the U.S. Bankruptcy Court adopts proposals
supported by  certain of the Company's creditors or if the Company were forced
into liquidation.

3.   UNCERTAINTIES OF OUTCOME OF BANKRUPTCY.  While the Company has expended
substantial resources for the development of its Club in San Francisco,
California.  The Club is subject to changing state and municipal codes and
ordinances and the many uncertainties associated with its bankruptcy.


                                      30
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<PAGE>

4.   CURRENT FINANCIAL STRUCTURE, LIMITED EQUITY, LIMITED WORKING CAPITAL &
NEED FOR ADDITIONAL FINANCING.  While the Company's management believes that
its financial policies have been prudent, the Company has relied, in large
part, upon the use of debt financing to provide a substantial portion of the
Company's financial needs.  The Company has, as of June 30, 2002, an aggregate
of $2,300,882 in current liabilities that are due for payment prior to
June 30, 2003.  If the Company is to survive, the Company will need to obtain
additional equity or debt financing on reasonable terms and, in addition, the
Company will need to receive favorable determinations from the Bankruptcy Court
to permit it to avoid a liquidation and adverse reorganization plan.  There can
be no guarantee that the Company will be successful in obtaining any such
financing, avoid any such adverse determinations by the bankruptcy court or
that the Company's existing stockholders will not lose all of their investment.

5.   AUDITOR'S OPINION:  GOING CONCERN.  Except for the explanatory paragraph
included in the firm's report on the financial statements for the years ended
December 31, 2000 and 2001, relating to the substantial doubt existing about
the Company's ability to continue as a going concern, the audit report did not
contain an adverse opinion or disclaimer of opinion, nor were they qualified or
modified as to uncertainty, audit scope, or accounting principles.

6.   SUBORDINATE TO EXISTING AND FUTURE DEBT & AUTHORIZED BUT UNISSUED
PREFERRED STOCK.  All of the Common Stock is subordinate to the claims of the
Company's existing and future creditors and any future holders of the Company's
preferred stock.  The Company is authorized to issue up to 8,000,000 shares of
the Company's preferred stock and currently the Company has not issued any
preferred stock.

7.   MARKETING STRATEGY.  While the Company believes that the operation of the
Club will be successful, there is no guarantee that these business operations
will be commercially accepted with sales revenues sufficient to permit the
Company to achieve or maintain profitable operations.

8.   LIMITED PUBLIC MARKET.  There is a limited trading market for the
Company's Common Shares, and there is no guarantee that a continuous liquid
trading market will subsequently develop.  There can be no assurance that the
Common Shares will ever gain any liquid trading volumes in any other market or
gain listing on any stock exchange.  Further, the Company's Common Stock is a
"Penny Stock" and as such, the ability of the Company to gain a liquid trading
market for it will be inhibited by various regulations and there can be no
assurance that any liquid trading market for the Company's Common Stock will
ever develop or, if it does develop, that it can be maintained.

9.   CONCENTRATION & LACK OF DIVERSIFICATION.  The Company's assets are
invested almost entirely in the existing Club.  While the Company believes that
will be successful, in the event that the Club is not successfully received by
the market, the Company will likely incur substantial and protracted losses
since the Company lacks diversification.

10.  CONTROL BY OFFICERS AND DIRECTORS.  The Company's present directors and
officers hold the power to vote an aggregate of 37.66% of the Company's Common
Shares as of December 31,  2001 (after including any shares purchasable upon
exercise of all existing common stock purchase options held by the Company's
officers and directors).  The Company has granted a common stock purchase
option (the "First Amato Option") to Ralph M. Amato, the Company's Chairman,
President, Secretary, and Founder.  The First Amato Option grants Mr. Amato the
right to purchase 1,200,000 shares of the Company's Common Stock at an exercise
price of $0.25 per Common Share.  The First Amato Option has no expiration
date.  In addition, Mr. Amato holds a second common stock purchase option for
the purchase of 600,000 shares of the Company's Common Stock with an exercise
price of $0.25 per share (the "Second Amato Option").  The Second Amato Option
expires February 13, 2004.  Finally, Michael L. Potter, the Company's Secretary
and Director, holds an option to purchase 250,000 shares of the Company's
Common Stock at a purchase price of $0.25 per share (the "Potter Option").
The Potter Option expires on February 13, 2004.


                                      31
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<PAGE>

11.  COMPETITION.  The Company's existing Club (and any other clubs that the
Company may establish) will face severe competition from several established
companies who have well-established operations, experienced management, and
possess significantly greater financial resources.  In addition, the
gentlemen's  club business is very competitive and many of competitors have
substantially greater managerial resources.  Further, because the gentlemens
club business is dependent upon the uncertain commercial viability of the
Company's business, it is especially sensitive to ever-changing and
unpredictable competitive trends which can not be easily predicted and which
are beyond the control of the Company.  Finally, the Company's sale of any
consigned artwork and memorabilia items can not be guaranteed since competition
from other retail outlets is intense and the availability of desired items for
items to display in the Club may not be desired by some sellers of such items.
For these and other reasons, the Company's business may be said to be riskier
than investments in other types of businesses.

12.  DEPENDENCE UPON KEY PERSONNEL AND NEW EMPLOYEES.  The Company believes its
success will depend, to a significant extent, on the efforts and abilities of
Ralph M. Amato, the Company's President and CEO.  The loss of the services of
Mr. Amato could have a material and continuing adverse effect on the Company.
The Company's success also depends upon its ability to attract and retain
qualified employees.  Hiring to meet anticipated Company operations will
require the Company to assimilate significant numbers of new employees during a
relatively short period of time.

13.  KEY MAN INSURANCE & LIMITED FULL-TIME MANAGEMENT.  While the Company
currently plans to obtain key man life insurance on the life of Ralph M. Amato,
the Company has no key man life insurance on his life.  In the event that he is
unable to perform his duties, the Company's business may be adversely impacted.
If the Company grows, it will need to hire additional management and the
ability of the Company to employ suitable management at a cost acceptable to
the Company, in light of the Company's limited financial resources, can not be
assured.

14.  LACK OF INDEPENDENT EVALUATION OF BUSINESS PLAN & PROPOSED STRATEGY.
The Company has not obtained any independent evaluation of the Company's
Business Plan and the Company's proposed business strategy.  There can be no
assurance that the Company's Club or proposed strategy will generate any
revenues, or if revenues can be generated, that they can be generated at a
level to maintain profitability.

15.  NO ASSURANCE OF AVAILABILITY OF THE ADDITIONAL CAPITAL & PAYMENT OF DEBTS.
The Company's continued operation of its existing Club will be dependent upon
the Company's ability to meet its obligations due as Total Current Liabilities
and those required by the U.S. Bankruptcy Court for payment of administrative
claims and other associated costs and expenses.  There can be no assurance that
the Company will be successful in paying these debts.

16.  NO LIKELIHOOD OF DIVIDENDS.  The Company does not anticipate that it will
pay any dividends on the Company's Common Stock.  Any profits that the Company
may generate, if any, will be reinvested into the Company.

17.  GOVERNMENT REGULATION & EXOTIC ENTERTAINMENT INDUSTRY.  The Company seeks
to operate establishments that offer "female exotic entertainment."  This
business routinely suffers severe and unfavorable regulatory burdens, adverse
zoning ordinances, and other oppressive government regulations which may result
in the Company incurring substantial losses and significant delays in
connection with the development of any establishment.


                                      32
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<PAGE>

18.  LACK OF DIVERSIFICATION.  The Company's proposed business involving the
operation of establishments offering "female exotic entertainment" will not
provide any diversification.  If the Company is successful, all of the
Company's business and assets will be concentrated in the same industry.

19.  POTENTIAL DILUTION.  Funding of the Company's business plan is likely to
result in substantial and on-going dilution of the Company's existing
stockholders.  While there can be no guarantee that the Company will be
successful in raising additional capital, if the Company is successful in
obtaining any additional capital, existing stockholders may incur substantial
dilution.

20.  RULE 144 STOCK SALES.  As of December 31, 2001, the Company had 2,541,374
shares of the Company's outstanding Common Stock as "restricted securities"
which may be sold only in compliance with Rule 144 adopted under the Securities
Act of 1933 or other applicable exemptions from registration. Rule 144 provides
that a person holding restricted securities for a period of one year may
thereafter sell in brokerage transactions, an amount not exceeding in any three
month period the greater of either (i) 1% of the Company's outstanding Common
Stock, or (ii) the average weekly trading volume during a period of four
calendar weeks immediately preceding any sale.  Persons who are not affiliated
with the Company and who have held their restricted securities for at least two
years are not subject to the volume limitation. Possible or actual sales of the
Company's Common Stock by present shareholders under Rule 144 may have a
depressive effect on the price of the Company's Common Stock if any liquid
trading market develops.

21.  RISKS OF LOW PRICED STOCKS.  Trading in the Company's Common Stock is
limited since the Company's Common Stock is a "Penny Stock" and thereby the
retail market for the Common Stock is subject to burdens that are imposed on
brokers whose customers may wish to acquire the Company's Common Stock.

     Consequently, a shareholder may find it more difficult to dispose of, or
to obtain accurate quotations as to the price of, the Company's securities.
In the absence of a security being quoted on NASDAQ, or the Company having
$2,000,000 in net tangible assets, trading in the Common Stock is covered by
Rule 3a51-1 promulgated under the Securities Exchange Act of 1934 for non-
NASDAQ and non-exchange listed securities. Under such rules, broker/dealers
who recommend such securities to persons other than established customers and
accredited investors (generally institutions with assets in excess of
$5,000,000 or individuals with net worth in excess of $1,000,000 or an annual
income exceeding $200,000 or $300,000 jointly with their spouse) must make a
special written suitability determination for the purchaser and receive the
purchaser's written agreement to a transaction prior to sale. Securities are
also exempt from this rule if the market price is at least $5.00 per share, or
for warrants, if the warrants have an exercise price of at least $5.00 per
share. The Securities Enforcement and Penny Stock Reform Act of 1990 requires
additional disclosure related to the market for penny stocks and for trades in
any stock defined as a penny stock.

     The Commission has adopted regulations under such Act which define a penny
stock to be any NASDAQ or non-NASDAQ equity security that has a market price or
exercise price of less than $5.00 per share and allow for the enforcement
against violators of the proposed rules.

     In addition, unless exempt, the rules require the delivery, prior to any
transaction involving a penny stock, of a disclosure schedule prepared by the
Commission explaining important concepts involving a penny stock market, the
nature of such market, terms used in such market, the broker/dealer's duties to
the customer, a toll-free telephone number for inquiries about the
broker/dealer's disciplinary history, and the customer's rights and remedies in
case of fraud or abuse in the sale.


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     Disclosure also must be made about commissions payable to both the
broker/dealer and the registered representative, current quotations for the
securities, and, if the broker/dealer is the sole market maker, the
broker/dealer must disclose this fact and its control over the market.
Monthly statements must be sent disclosing recent price information for the
penny stock held in the account and information on the limited market in penny
stocks.

     While many NASDAQ stocks are covered by the proposed definition of penny
stock, transactions in NASDAQ stock are exempt from all but the sole market-
maker provision for (i) issuers who have $2,000,000 in tangible assets has been
in operation for at least three years ($5,000,000 if the issuer has not been in
continuous operation for three years), (ii) transactions in which the customer
is an institutional accredited investor, and (iii) transactions that are not
recommended by the broker/dealer.

     In addition, transactions in a NASDAQ security directly with the NASDAQ
market maker for such securities, are subject only to the sole market-maker
disclosure, and the disclosure with regard to commissions to be paid to the
broker/dealer and the registered representatives.  The Company's securities are
subject to the above rules on penny stocks and the market liquidity for the
Company's securities could be severely affected by limiting the ability of
broker/dealers to sell the Company's securities.


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PART II - OTHER INFORMATION (Unaudited)


Item 1.  Legal Proceedings

     On May 8, 2001, the Company filed a petition in Federal Bankruptcy Court
for the Northern District of California (the "Court").  In its petition, the
Company seeks to effect a reorganization in accordance with a plan to be
submitted to the Court.

     The petition was filed in response to efforts by the landlord (or owner of
the real property at which the Company's Club is located) to effect a three day
demand notice seeking the Company's immediate payment of $100,000 in payment of
an outstanding lien on the real property.   Subsequently, on August 10, 2001,
the Company paid the landlord the $100,000 in full payment of the lien. As of
the date of this Form 10-QSB, the Court has not made a determination in
response to the petition.  There can be no assurance that the Court will make
any determinations favorable to the Company.


Item 2.  Changes in Securities

     Not applicable.


Item 3.  Defaults Upon Senior Securities

     Not applicable.


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

     None.


Item 5.  Other Information

     Not applicable.


Item 6.  Exhibits and Reports on Form 8-K

     (a) Exhibits

     The following exhibits have been filed with the Company's Form 10-SB and
are hereby incorporated by reference herein:

      3     Certificate of Incorporation - Wagg Corp.
      3.1   Amendment to Certificate of Incorporation - Wagg Corp.
      3.2   Amendment to Certificate of Incorporation - Wagg Corp.
      3.3   By-Laws of Wagg Corp. (Delaware)
      3.4   Articles of Incorporation - Alternative Entertainment, Inc. (NV)
      3.5   By-Laws of Alternative Entertainment, Inc. (NV)
      4.1   Specimen of Common Stock Certificate

     10     Agreement for the Purchase of Common Stock
     10.1   Lease for Office Space in La Jolla, California
     10.2   Lease of Real Property from Roma Cafe, Inc.
     10.3   Lease of Apartment Units in San Francisco, California
     10.4   Indemnification Agreement between the Company and Ralph M. Amato
     10.5   Agreement with Itex Corporation
     10.6   Employment Agreement Between the Company and Gary Marlin
     10.7   Loan Agreement with Unsecured Convertible Note
     10.8   Unsecured Promissory Note (C. Palozzi)
     10.9   Settlement Agreement With Bowne of Los Angeles, Inc.
     10.10  Unsecured Promissory Note (V. Amato)

     10.11  Unsecured Promissory Note (V. Amato)
     10.12  Secured Promisory Note (R. Smith)
     10.13  Secured Promissory Note (I. Weeda Family Trust)
     10.14  Secured Promissory Note (I. Weeda Family Trust)
     10.15  Secured Promissory Note (K. Marc)
     10.16  Secured Promissory Note (G. W. Smith)
     10.17  Secured Promissory Note (D. Hylton)
     10.18  Secured Promissory Note (M. Yonika)
     10.19  Unsecured Promisory Note (R. Kaelan)
     10.20  Unsecured Convertible Promissory Note ($300,000 - Chin)

     10.21  Addendum to Promissory Note (Essex)
     10.22  Unsecured Promissory Note ($70,000 - Amato)
     10.23  Unsecured Promissory Note ($16,000 - Amato)
     10.24  Unsecured Promissory Note ($100,000 - Chin)
     10.25  Unsecured Promissory Note ($25,000- I. Weeda Family Trust)
     10.26  Unsecured Promissory Note ($25,000 - I. Weeda Family Trust)
     10.27  Loan Agreement & Convertible Unsecured Promissory Note
            ($50,000 - Kawesch)
     10.28  Unsecured Promissory Note ($100,000 - Lewis Chin)
     10.29  Unsecured Promissory Note ($25,000 - Thomas Johnson)
     10.30  Loan Agreement & Convertible Unsecured Promissory Note
            ($25,000-Tinney)

     23.1   Consent of Pannell Kerr Forster
     23.2   Resignation of Pannell Kerr Forster
     23.3   Consent of Pannell Kerr Forster
     23.4   Acknowledgment of Armando C. Ibarra

     (b)  Reports on Form 8-K

     No reports on Form 8-K were filed during the quarter ended June 30, 2002.


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                                  SIGNATURES


Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

                                       Registrant:
                                       BoysToys.com, Inc.



                                       /s/ Ralph M. Amato
                                       ------------------
                                       Ralph M. Amato
                                       President, Chief Executive Officer
                                       Chief Financial Officer



Date: August 15, 2002


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