UNITED STATES
                     SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C. 20549
                     __________________________________

                                FORM 10-KSB
                     __________________________________

(X)  Annual report pursuant to sections 13 or 15(d) of the Securities
     Exchange Act of 1934 for the fiscal year ended December 31, 2003.

(  ) Transition report pursuant to section 13 or 15(d) of the Securities
     Exchange Act of 1934.

                       Commission File Number 0-27727

                     Redwood Entertainment Group, Inc.
               (Name of small business issuer in its charter)

     Nevada                                                 91-1766174
(State of jurisdiction of                             (I.R.S. Employer
 incorporation or organization)                      Identification Number)

               9852 West Katella Ave #363 Anaheim, CA. 92804
                       Telephone:     (714) 740-0601
       (Address and telephone number of principal executive offices)


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

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

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

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

The issuer's revenue for its most recent fiscal year was: $-0-.

The aggregate market value of the issuer's voting stock held as of March
24, 2004, by non-affiliates of the issuer was approximately $746,735.

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

Documents incorporated by reference: None

                             TABLE OF CONTENTS


                                   PART I

ITEM 1.   DESCRIPTION OF BUSINESS. . . . . . . . . . . . . . . . . . . . .3

ITEM 2.   DESCRIPTION OF PROPERTY. . . . . . . . . . . . . . . . . . . . .9

ITEM 3.   LEGAL PROCEEDINGS. . . . . . . . . . . . . . . . . . . . . . . .9

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. . . . . . .9

                                  PART II

ITEM 5.   MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS . . . .9

ITEM 6.   MANAGEMENT DISCUSSION AND ANALYSIS OR PLAN OF OPERATION. . . . 11

ITEM 7.   FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . 16

ITEM 8.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
          ACCOUNTING AND FINANCIAL DISCLOSURE. . . . . . . . . . . . . . 36

ITEM 8A.  CONTROLS AND PROCEDURES. . . . . . . . . . . . . . . . . . . . 36

                                  PART III

ITEM 9.   DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS,
          AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a)
          OF THE EXCHANGE ACT. . . . . . . . . . . . . . . . . . . . . . 36

ITEM 10.  EXECUTIVE COMPENSATION . . . . . . . . . . . . . . . . . . . . 39

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
          AND MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . 41

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS . . . . . . . . 42

ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K . . . . . . . . . . . . . . . 43

ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES . . . . . . . . . . . . 43

SIGNATURES AND CERTIFICATIONS










                                     2

                                   PART I


ITEM 1.  DESCRIPTION OF BUSINESS

History of the Company
----------------------

     The Company was organized and authorized on November 3, 1986, to
pursue any lawful purpose or purposes. The Company amended its Articles of
Incorporation on September 30, 1987, changing its name to Tzaar Corporation
and authorizing common stock of 100,000,000 shares at par value of $0.001.
From 1989 to 1996, the Company did not engage in any business activity.
During this time the Company had no significant revenues and was considered
to be a "development stage company."

     On December 28, 1996, the Company entered into a Plan of
Reorganization with Genesystems, Inc. ("Genesystems"), a corporation
organized in the state of Nevada on December 12,1996.  In connection with
the Plan of Reorganization, the Company made a one for ten reverse split of
its outstanding shares; issued an additional 7,500,000 post-split
restricted shares to effect a share exchange with Genesystems; and
authorized and issued an additional 3,500,000 common shares in a limited
offering.  As a result of the reverse acquisition, control of the Company
was acquired by Genesystem shareholders.  The acquisition of the public
shell (Tzaar Corporation) was accounted for as a recapitalization.  The
previous business of the Company at that time was the business of
developing therapies that can treat major diseases and disorders of the
human blood system.

     In December 1996, the Company changed its name to Gencell, Inc. and
appointed new officers and directors to the Company.  On September 29, 1997
the Company changed its name to Gene-Cell, Inc.  From December 1996 to
December 2002, the Company focused its plan of operations on the business
of developing therapies that can treat major diseases and disorders of the
human blood system.

     On August 26, 2002, Gene-Cell, Inc. entered into an Agreement and Plan
of Reorganization (the "Agreement") whereby the Company acquired all of the
issued and outstanding shares of Energy Resource Management, Inc., ("ERMI")
in exchange for 4,000,000 restricted common shares.  The Agreement
represented a recapitalization of ERMI with accounting treatment similar to
that used in a reverse acquisition.  In the Reorganization, ERMI assumed
the accounts payable and accrued liabilities of the Company.

     In January 2003 the Company adopted a name change to Redwood Energy
Group, Inc. as it sought to begin a business focused in the energy-
marketing sector. However, problems in the energy marketing sector,
particularly in California, caused the Company to be unsuccessful in that
endeavor. In considering its options, the Company believed that
opportunities existed in the entertainment industry and, accordingly, the
Company adopted a name change to Redwood Entertainment Group, Inc.

                                     3



     The Company continues to be considered as a development stage
enterprise because it has not yet generated revenue from sale of its
products and/or services. Since its inception, the Company has devoted
substantially all of its efforts to development of its products and
services and the search for sources of capital to fund its efforts.

Business of the Company
-----------------------

     The Company intends to conduct business in the entertainment industry
and to investigate other appropriate business ventures.  The Company has
discontinued both its energy marketing and biotechnology activities.

Entertainment
-------------

     Implementing the Company's Business Model
     -----------------------------------------

     -    The Company intends to develop into one of the premier
          independent multimedia companies in entertainment.  The Company
          will be a multiple platform production company with an ultimate
          goal of comprehensive brand exploitation, from feature film
          development to toys.  To accomplish these goals, the Company will
          seek to:

     -    Capitalize on the emergent needs and demands of the market with
          principle-themed multicultural content; and

     -    Present a framework for new business and product decision-making
          that ensures strategic consistency.

     To this end, during the first quarter 2003, the Company entered into
an agreement to acquire DreamCity Entertainment.  This acquisition was
finalized during the fourth quarter of 2003.   The Company believes the
acquisition of DreamCity will enhance the Company's reputation in the
industry.

     The Company believes that recent trends in the entertainment industry
signal a shift in the way entertainment companies conduct business.  These
trends include:

     -    The deconstruction of the studio system in the film and
          television industry has led to challenges in capturing economies
          of scale.  Those that have been able to develop a cooperative
          model have demonstrated profitability that outperforms the
          sector.  The keys appear to be ownership of high quality content
          and multiple profit centers due to thoroughly exploiting these
          quality properties across multiple platforms.

     -    Honoring the craftsman, in other words providing the creators of
          high-quality intellectual properties creative authority and
          profit-sharing incentives.

     -    Entertainment companies that relied on non-creative executives to
          oversee intellectual property development have over the past five
          demonstrated profitability declines.

                                     4


     The Company will structure its business and operational focus to try
and take advantage of these trends.    To this end it is the Company's
primary goal to provide high quality content in a number of key segments of
the entertainment industry.  Specifically, at this time the Company intends
to focus on the following markets:

     -    The children's inspirational market.  The Company believes this
          market will see significant growth in near future.  There was a
          42% increase in inspirational video sales in 2002, and sales in
          this segment are forecasted to double by the end of 2005.  The
          success of the theatrical feature "The Passion" is a further
          demonstration of this trend.

     -    The family-themed inspirational market.  This segment appears to
          be dramatically underserved.  One company currently owns 67% of
          the $750 million gross sales market with one series of 14 direct-
          to-video titles.  This product line has realized 28.5 million
          units of sales since 1994. These impressive sales figures were
          accomplished through grassroots and specialty distribution.  Only
          recently did a mainstream distributor pick up this line.

     -    The urban multicultural market.  The Company hopes to capitalize
          on the established credibility of Michael Davis, the President of
          DreamCity to become a significant influence in the urban
          multicultural market.

     -    The family entertainment market.  This market has experienced
          exponential growth every year over the last ten years due to the
          growth of this demographic audience and an associated increase in
          discretionary funds that they have available to them.

     In implementing its business model, the Company intends to rely on the
skills and expertise of the creative personnel with which it will
collaborate.  The Company believes that by putting in place the necessary
elements and then allowing the creative experts to have input into and
guide product development, combined with the ability to participate
financially in the success of the project, the Company will be able to
attract and retain high quality creative talent.

     Moreover, by involving the creative personnel in certain matters, the
Company believes it can reduce up front development risk.   Development
risk is an industry dynamic wherein significant capital is spent on the
front end of projects with no assurances of returns.

     At this time, the Company envisions implementing its business plan in
several phases.  In Phase One the Company will seek to recruit resources to
support projects and establish operations.    The operational framework for
all negotiations can be defined as follows:

                                     5

     -    All ventures will be encouraged to work cooperatively to secure
          necessary services, whenever prudent, from each other.  An
          example would be a film production working with DreamCity for
          print and advertising development for distribution.

     -    Each sponsored venture will provide a negotiated fee to Redwood
          Entertainment Group to offset minimal operating costs and
          expenses for the venture.

          In exchange for the negotiated fee, Redwood will be responsible
          for executing Phase Two funding which can provide additional
          operational/project specific funding for the ventures.

     -    Redwood will conduct activities specifically negotiated with the
          individual ventures such as additional capital recruitment for
          projects and securing institutional lines of credit and/or
          necessary partnerships.

     -    Ancillary profit centers linked to licensing and merchandising
          opportunities will be developed upon mutual consultation.

     -    Redwood will be responsible for establishing business entities
          that will optimize opportunities.

     -    Selected individual will be offered additional contracts to
          consult on the creation of Phase Two and Three strategies.  This
          will establish internal loyalty as well as provide us with
          recommendations from exceptional industry professionals.

     In Phase Two, projects will be fully launched.  The Company is
currently unsure of the timing of Phase Two, but in Phase Two, the initial
alliances created in Phase One will be configured as either joint ventures
or as full acquisitions.  The principals of each alliance will
concomitantly be subject to project-specific profitability requirements
linked to Phase One funding as well as operational accountability that will
make them eligible for participation in potential Phase Two funding.  Some
of the Company's activities may be positioned for divesting or for creation
as a semi-autonomous division within the Company structure.  An example
would be creating a separate division for the inspirational market to
facilitate multiple platform launches.  Sources of funds to support
operations and projects are expected to come from short-range revenues from
operations, production-specific funding such as debt financing, producer
fees, or product placement sponsorships, and investor recruitment.

Phase Three activities, which will begin no sooner than later than the
third quarter  2004, are expected to focus on pre-production of film and
television projects that have been developed.  During Phase Three, the
Company's primary goals will be to assure the creation of principle-themed
content that can be franchised into multiple markets; to develop a
replicable process for incubating promising media ventures and bringing
them to market; and to create and enhance brand and image awareness for all
contributing entities.


                                     6

     Throughout all phases of implementation and thereafter, the Company
believes it will have to be successful in the following areas if it wishes
to compete in this highly competitive industry:

     -    Developing original content that can lead to intellectual
          property creation;

     -    Acquiring ownership interest in externally-developed intellectual
          property that is compatible with the vision of this endeavor;

     -    Evaluating the market on a constant basis;

     -    Producing sufficient critical mass for brand establishment.

     -    Matrix-like strategic planning that will allow the Company to
          prepare for maximum bland exploitation from inception;

     -    Recruiting resources, including cash investments that will
          initially support operations.  After short-range revenues begin
          to be realized, investments will generally be recruited that will
          be used for project-specific support and/or operational expansion
          through acquisitions.

     Sources of Revenue
     ------------------

     With the implementation of the Company's business model, the Company
expects to derive revenue from the following sources:

     -    Film production and related revenue streams, including
          participation and producer fees;

     -    Television production and related revenue streams, which may also
          include participation and producer fees;

     -    Graphic design related revenue;

     -    Publishing related revenue;

     -    Product distribution;

     -    Talent management; and

     -    Licensing and Merchandising.


                                     7

     Marketing
     ---------

     The overall strategy for branding and release of Company products will
incorporate both traditional, mature, and sophisticated marketing
activities which are standard in the mainstream market with the addition of
niche strategies.  Awareness will be established through the following
methods:

     -    Developing a major distribution campaign to coordinate release
          through all major retailers of this type of type of family-themed
          content;

     -    Launching a public relations campaign which will include press
          releases, TV and radio talk show appearances, grassroots mailings
          to compatible organizations, pre-release screenings, and personal
          appearances at venues, trade shows and conferences;

     -    Establishing a web presence that will include both project
          launches and operation of the Redwood Entertainment Group site as
          well as links to compatible sites;

     -    Developing video and music loops;

     -    Developing point of purchase items such as standups, etc.;

     -    Providing co-operative advertising opportunities for local
          retailers;

     -    Conducting comprehensive advertising in all mediums: TV,
          magazine, radio, etc.

     -    Sales channels will include the following:

     -    Mainstream retail;

     -    Family niche retail;

     -    Direct shopping such as HSN;

     -    Niche wholesale networks such as Christian Booksellers
          Association;

     -    Internet sales.

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

     Competition in the entertainment industry is intense.  Many of the
Company's competitors have substantially greater experience, financial
resources and marketing capabilities than the Company.  Most of the
Company's competitors have significantly greater financial resources and
can afford to spend more than the Company can to develop and market
products.  Moreover, most of the Company's competitors have been in the
market longer than it has and have established relationships that could
preclude the Company from successfully participating in the market.


                                     8

Number of Employees
-------------------

     The Company currently has no full-time employees but does pay
consulting fees to two directors of the Company, Mario Procopio and Michael
Davis.  Pursuant to a consulting agreement between Dr. Procopio and the
Company, Dr. Procopio receives compensation for advising the Company on
business development, business strategy, corporate image and equity fund
raising.  Michael Davis is compensated for services rendered to DreamCity.

Reports to Security Holders
---------------------------

     The public may read and copy any materials filed by the Company with
the SEC at the SEC's Public Reference Room at 150 Fifth Street, N.W.,
Washington, D.C. 20549. The public may obtain information on the operation
of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The
Company is an electronic filer and the SEC maintains an Internet site that
contains reports and other information regarding the Company, which may be
viewed at http://www.sec.gov.

ITEM 2.  DESCRIPTION OF PROPERTY

     The Company is currently negotiating a sublease for office space for
its principal executive offices at 1414 East Katella Avenue in Anaheim,
California.  The party with whom the Company is negotiating the sublease
may be deemed a related party through a common board member.

ITEM 3.  LEGAL PROCEEDINGS

     To the knowledge of the Company, it is not a party to any pending
material legal proceedings.  To the knowledge of management, no federal,
state, or local governmental agency is presently contemplating or
proceeding against the Company.  To the knowledge of the management, no
director, officer or affiliate of the Company or owner of record or
beneficiary of more than 5% of the Company's common stock is a party
adverse to the Company or has a material interest adverse to the Company in
any proceeding.

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

     None.

PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER   MATTERS

     The Company's common stock is currently listed on the Over the Counter
Bulletin Board ("OTCBB"), under the symbol "RDWE".  As of May 13, 2004, the
Company had approximately 119 shareholders holding 60,729,684 shares of
common stock issued and outstanding.  Of the issued and outstanding common
stock approximately 3,288,157 are free trading, the balance are restricted
stock as that term is used in Rule 144.  The Company has never declared a
dividend on its common stock other than a special dividend issued to one
investor in 1998.

                                     9

     The published bid and ask quotations from January 1, 2002 through
December 31, 2003, are included in the chart below.  These quotations
represent prices between dealers and do not include retail markup, markdown
or commissions.  In addition, these quotations do not represent actual
transactions.

<Table>
<Caption>
                                    Bid                      Ask
                             High          Low        High          Low
     <S>                   <C>          <C>         <C>          <C>
     2003
     ----
     First Quarter              $3.50       $0.24        $8.00        $0.32
     Second Quarter              0.30        0.006        0.35         0.01
     Third Quarter              0.024        0.015        0.03         0.02
     Fourth Quarter             0.025        0.018        0.03         0.02

     2002
     ----
     First Quarter              $4.77        $2.38       $0.23        $0.11
     Second Quarter              3.25         0.65        0.10         0.03
     Third Quarter               1.39         0.17        4.15         0.01
     Fourth Quarter              2.00         0.17        6.00         0.15
</Table>

     The above information was obtained from the Over-the-Counter Bulletin
Board, NASDAQ Data Products, Historical Data Service.

     On March 24, 2004, the closing price of our Common Stock was $0.02 per
share. On the same date, we had approximately 119 stockholders of record,
including broker-dealers holding shares beneficially owned by their
customers. The above quotations as provided by the Pink Sheets, LLC,
represent prices between dealers and do not include retail markup, markdown
or commission.  In addition, these quotations do not represent actual
transactions.

RECENT SALES OF UNREGISTERED SECURITIES

     No instruments defining the rights of the holders of any class of
registered securities have been materially modified, limited or qualified.

     During the quarter ended December 31, 2003, the Company issued the
following securities, which were not registered under the Securities Act of
1933.

     On October 1, 2003, the Company sold 2,000,000 restricted common
shares to an investor for $40,000 in a private transaction.  The shares
were issued without registration under the Securities Act of 1933 in
reliance on an exemption from registration provided by Section 4(2) of the
Securities Act.  No general solicitation was made in connection with the
offer or sale of these securities.

                                     10

     On October 27, 2003, the Company issued 20,000,000 restricted shares
of common stock to Michael Davis to finalize the acquisition of DreamCity
Entertainment.  For purposes of the acquisition the shares were valued at
$0.027 per share.  The shares were issued without registration under the
Securities Act of 1933 in reliance on an exemption from registration
provided by Section 4(2) of the Securities Act.  No general solicitation
was made in connection with the offer or sale of these securities.

ITEM 6.   PLAN OF OPERATIONS

     Forward Looking Information and Cautionary Statement

     In accordance with the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995, the Company notes that certain
statements set forth in Item 7 and elsewhere in this report, which provide
other than historical information and which are forward looking, involve
risks and uncertainties that may impact the company's actual results of
operations.  The Company faces many risks and uncertainties, many of which
are beyond the control of the company, including: fluctuations in oil and
gas prices; level of fleet additions by competitors; changes in capital
spending by customers in the media and technology industries for
exploration, development and production; unsettled political conditions,
civil unrest and governmental actions, especially in higher risk countries
of operations; foreign currency fluctuations; and environmental and labor
laws.  Other risk factors are discussed elsewhere in this Form 10-KSB.

     Forward-looking statements, which can generally be identified by the
use of such terminology as "may," "expect," "anticipate," "estimate,"
"forecast," "believe," "think," "could," "will," "continue," "intend,"
"seek," "plan," "should," "would" and similar expressions contained in this
report, are predictions and not guarantees of future performance or events.
The forward-looking statements are based on current industry, financial and
economic information, which the company has assessed but which by its
nature is dynamic and subject to rapid and possibly abrupt changes.  The
Company's actual results could differ materially from those stated or
implied by such forward-looking statements due to risks and uncertainties
associated with our business.  The forward-looking statements should be
considered in the context of the risk factors listed above and discussed
elsewhere in this Form 10-KSB.  Investors and prospective investors are
cautioned not to place undue reliance on such forward-looking statements.
Management disclaims any obligation to update or revise the forward-looking
statements contained herein to reflect new information, future events or
developments.

     For a complete understanding, this Plan of Operations should be read
in conjunction with Part I, Item 1- Description of Business and Item 7 -
Financial Statements of this Form 10-KSB.


                                     11

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

     The Company's discussion and analysis of its financial condition and
results of operations are based upon its consolidated financial statements,
which have been prepared in accordance with generally accepted accounting
principles in the United States. The preparation of these financial
statements requires the Company to make estimates and judgments that affect
the reported amounts of assets, liabilities, revenue and expenses, and
related disclosure of contingent assets and liabilities. On an ongoing
basis, the Company evaluates its estimates. The Company bases its estimates
on historical experience and on various other assumptions that are believed
to be reasonable under the circumstances. These estimates and assumptions
provide a basis for making judgments about the carrying values of assets
and liabilities that are not readily apparent from other sources. Actual
results may differ from these estimates under different assumptions or
conditions, and these differences may be material.

     The Company believes the following critical accounting policies affect
its more significant judgments and estimates used in the preparation of its
consolidated financial statements.

PRINCIPLES OF CONSOLIDATION

     The Company's consolidated financial statements include the accounts
of the Company and its majority owned or controlled subsidiaries after
elimination of all significant intercompany accounts and transactions.

GENERAL

     The Company continues to be considered as a development stage
enterprise because it has not yet generated revenue from sale of its
products and/or services.  Since its inception, the Company has devoted
substantially all of its efforts to development of its products and
services and the search for sources of capital to fund its efforts.  It is
the Company's intention to become a premier multimedia entertainment
company that creates and controls brands characterized as high quality,
principle-centered, and multicultural with profits resulting from thorough
brand exploitation.

     Business of the Company
     -----------------------

     The Company intends to conduct business in the entertainment sector
and complimentary media and technology activities.

     Dream City has been working  to launch development in three project
areas:

     -    a line of celebrity imprint children's' books;
     -    a graphic novel series for the inspirational market that will be
          expected to be developed across multiple platforms;
     -    a cooking/entertaining show for television.

                                     12

     A fundamental aspect of the mission of the Company is to honor and
promote the craftsman through whom intellectual properties are created.  An
important part of this strategy is supporting creation while retaining
ownership whenever possible. Distribution strategies are being defined at
this time and are expected to include a combination of mainstream
traditional retail, specialty/grassroots marketing, and e-commerce.
Marketing objectives will be two-fold: first, to establish interest for
increased product sales on these specific lines; second, to create an
awareness base that will amplify future launches of these brands  across
multiple mediums.

HOLLYWORD! CELEBRITY IMPRINT CHILDREN'S BOOK SERIES

     The Company is in discussion with mainstream publishing houses to
secure a distribution agreement on its celebrity imprint children's book
series.  This project titled "Hollyword!" is anticipated to finalize a
distribution commitment within the third quarter of 2004.  The Company has
received signed Letters of Intent from two celebrities who have committed
to the project and is awaiting receipt of additional commitments from three
other celebrities.  Release of the names of these personalities to the
market is conditioned on confirmation of a distribution commitment and is
forecasted to occur within the third quarter of 2004.

GENESIS  5 - GRAPHIC NOVEL SERIES

     The Company is developing a graphic novel series for the inspired
market that will be positioned from its inception for thorough brand
exploitation across multiple platforms.  Comics-based intellectual
properties have been providing evergreen returns within the entertainment
sector in increasing levels over the last decade.  The Company intends to
participate in this trend while producing the highest quality content and
retaining significant ownership percentages.  Company principles are in
discussion with both specialty market and mainstream publishers to secure
distribution commitments.

     DreamCity Entertainment is working to secure strategic alliances to
develop and produce creative properties that are compatible with the
mission of the Company.  These properties will be:

     -    high quality;
     -    principle centered;
     -    multicultural;
     -    designed from inception with inherent branding potential.

     To define the flavor of these properties and therefore create
efficient operational focus, these properties are further defined as having
the following qualities:

                                     13


     -    not espousing hatred of any kind, whether it be racism, misogyny,
          ageism or any other  expression that divides us and causes people
          to hang their heads low;
     -    not pornographic;
     -    respectful  of spiritual belief, particularly avoiding
          blasphemous or disrespectful expression;
     -    not glorifying drug use, whether it be lawful or illicit;
     -    not glamorizing the occult or what are described as the dark
          arts.

SOURCE OF FUNDS

     The Company has financed its operations mainly through the sale of its
common stock and through loans from related parties.  The Company is and
has been entirely dependent on outside sources of financing for
continuation of operations and there is no assurance that the Company will
be successful in obtaining additional funding on acceptable terms or at
all.  The Company's independent auditors have noted in their Report of
Independent Auditors and in the Notes to the Financial Statements that the
Company has incurred significant recurring losses from operations since
inception and is dependent on outside sources of financing for continuation
of its operations.  These factors raise substantial doubt about the
Company's ability to continue as a going concern.

     The Company is actively seeking additional funding, to finance ongoing
operations and new acquisitions.  There is no assurance that the Company
will be successful in obtaining additional funding on attractive terms or
at all.

     The Company anticipates it will need approximately $1,000,000.00 to
implement its media and technology business plans, launch operations and
support those operations for the next twelve months.  Capital recruitment
will be for either operational support, which is expected to include stock-
related transactions, or project specific funding, which can include
project specific revenue sharing, stock-related transactions, or a
combination of these. Until the Company is successful in securing full
funding to implement its business plan and meet its operational needs, the
Company is implementing the following strategies:

     1    Project-specific funding recruitment that includes a 10% overhead
          allocation is being emphasized as this creates a shorter horizon
          for the Company realizing revenues;

     2    Vender concessions such as deferred payments or exchanges for
          restricted stock are being sought to allow essential operations
          to continue;

     3    Agreements that can be appropriately secured using restricted
          stock in lieu of cash are being pursued.

     4    While not part of the Company's long-term strategy, sale of
          assets such as intellectual property yet to be created will be
          pursued if necessary.

     5    Consultants will be used for necessary activities until such a
          time as operational funding can allow for adding new hires.  The
          Company will seek to secure services Contracts will be secured
          using either restricted or S-8 stock, depending on the nature of
          the services provided.

                                     14

     Currently the Company has no commitment from any party to provide or
make funds available to it to meet these capital needs.  The Company is
seeking infusions of capital to help commence its operations.  At this
point, the Company will consider raising such capital through both equity
and debt financing.

RESULTS OF OPERATIONS

     The Company is considered to be in the development stage.  As a
development stage company, Redwood has not generated revenue since its
inception through the fourth quarter 2003. As of December 31, 2003, the
Company had losses accumulated from all of its previous configurations all
of which were in the in the development stage but were under different
management teams of $3,555,751 funded by paid-in capital. As of December
31, 2003, the Company has financed its operations mainly through the sale
of its common stock and has been entirely dependent on outside sources of
financing for continuation of operations. For the 2004 fiscal year, the
Company will continue to pursue funding for the business of Redwood
Entertainment Group as well as assign capital to the eradication of company
debt, the funding of projects that have low overhead/shorter range return
horizons, and funding towards acquisitions of companies that have the
potential of generating revenues.  There can be no assurance that the
Company will continue to be successful in obtaining additional funding on
attractive terms or at all, nor that the projects towards which additional
paid-in capital is assigned will generate any revenues.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

     In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities," which addresses financial
accounting and reporting for costs associated with exit or disposal
activities and supersedes Emerging Issues Task Force ("EITF") Issue No. 94-
3, "Liability Recognition for Certain Employee Termination Benefits and
Other Costs to Exit an Activity (including Certain Costs Incurred in a
Restructuring)." SFAS No. 146 requires companies to recognize costs
associated with exit or disposal activities when they are incurred rather
than at the date of a commitment to an exit or disposal plan. In addition,
SFAS No. 146 establishes that fair value is the objective for initial
measurement of the liability. SFAS No. 146 is effective for exit or
disposal activities initiated after December 31, 2002, but early adoption
is permitted. This adoption of this pronouncement did not have a material
effect on the Company's financial condition or results of operations.

     In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock
Based Compensation", which amends SFAS No. 123 to provide alternative
methods of transaction for an entity that voluntarily changes to the fair
value method of accounting for stock based employee compensation.  It also
amends the disclosure provisions of SFAS No. 123 to require prominent
disclosure about the effects on reported net income of an entity's
accounting policy decisions with respect to stock based employee
compensation.  Finally, SFAS No. 148 amends APB Opinion No. 28, "Interim
Financial Reporting", to require disclosure of those effects in interim
financial statements.  SFAS No. 148 is effective for fiscal years ended
after December 15, 2002, but early adoption is permitted.  The Company will
continue to follow the provisions of APB Opinion No. 25 in recognizing
employee stock-based compensation; however, the Company began following the
disclosure requirements of SFAS No. 148 in January 2003.

                                     15


     In January 2003, the FASB issued FASB Interpretation (FIN) No. 46
"Consolidation of Variable Interest Entities." FIN No. 46 requires a
company to consolidate a variable interest entity ("VIE") if the company
has variable interests that give it a majority of the expected losses or a
majority of the expected residual returns of the entity. Prior to FIN
No. 46, VIEs were commonly referred to as SPEs. FIN No. 46 is effective
immediately for VIEs created after January 31, 2003. This interpretation
did not have a material effect on the Company's financial condition or
results of operations.

     In April 2003, the FASB issued SFAS No. 149, Amendment to Statement
No. 133 on Derivative Instruments and Hedging Activities. This statement
amends and clarifies financial accounting and reporting for derivative
instruments, including certain derivative instruments embedded in other
contracts (collectively referred to as derivatives) and for hedging
activities under SFAS No. 133. The changes in SFAS No. 149 improve
financial reporting by requiring that contracts with comparable
characteristics be accounted for similarly. Those changes will result in
more consistent reporting of contracts as either derivatives or hybrid
instruments. SFAS No. 149 is effective for contracts entered into or
modified after June 30, 2003, except in certain instances detailed in the
statement, and hedging relationships designated after June 30, 2003. Except
as otherwise stated in SFAS No. 149, all provisions should be applied
prospectively. The adoption of this statement did not have a material
effect on the Company's financial condition or results of operations.


     In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity."
SFAS No. 150, which is effective at the beginning of the first interim
period beginning after June 15, 2003, must be implemented by reporting the
cumulative effect of a change in accounting principle for financial
instruments created before the issuance date of the statement and still
existing at the beginning of the interim period of adoption. The statement
requires that a financial instrument which falls within the scope of the
statement to be classified and measured as a liability. The following
financial instruments are required to be classified as liabilities:
(1) shares that are mandatorily redeemable, (2) an obligation to repurchase
the issuer's equity shares or one indexed to such an obligation and that
requires or may require settlement by transferring assets and (3) the
embodiment of an unconditional obligation that the issuer may or may not
settle by issuing a variable number of equity shares if, at inception, the
monetary value of the obligation is based on certain measurements defined
in the statement. The adoption of this statement did not have a material
effect on the Company's financial condition or results of operations.


ITEM 7.  FINANCIAL STATEMENTS

     The information required hereunder is included in this report as set
forth in the "Table of Contents" on Page F-1.










                     REDWOOD ENTERTAINMENT GROUP, INC.
                  (A CORPORATION IN THE DEVELOPMENT STAGE)
                                 __________




                     CONSOLIDATED FINANCIAL STATEMENTS
                   WITH REPORT OF INDEPENDENT ACCOUNTANTS
          for the year ended December 31, 2003 and for the periods
       from inception, August 13, 2002, to December 31, 2003 and 2002

























                                          F-1




                     REDWOOD ENTERTAINMENT GROUP, INC.
                  (A CORPORATION IN THE DEVELOPMENT STAGE)
                             TABLE OF CONTENTS
                                 __________

                                                                      Page
                                                                     ------

Report of Independent Accountants                                     F-3

Consolidated Financial Statements:

  Consolidated Balance Sheet as of
    December 31, 2003                                                 F-4

  Consolidated Statement of Operations
    for the year ended December 31, 2003 and for
    the periods from inception, August 13, 2002,
    to December 31, 2003 and 2002                                     F-5

  Consolidated Statement of Stockholders'
    Deficit for year ended December 31, 2003 and
    for the periods from inception, August 13, 2002,
    to December 31, 2003 and 2002                                     F-6

  Consolidated Statement of Cash Flows for the year
    ended December 31, 2003 and for the periods from
    inception, August 13, 2002, to December 31, 2003
    and 2002                                                          F-8

Notes to Consolidated Financial Statements                            F-9



























                                             F-2







Report of Independent Accountants



To the Stockholders and Directors
Redwood Entertainment Group, Inc.


We have audited the accompanying consolidated balance sheet of Redwood
Entertainment Group, Inc. (a corporation in the development stage) as of
December 31, 2003, and the related consolidated statements of operations,
stockholders' equity and cash flows for the year ended December 31, 2003
and for the periods from inception, August 13, 2002, to December 31, 2003
and 2002.  These financial statements are the responsibility of the
Company's management.  Our responsibility is to express an opinion on these
financial statements based upon our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States of America.  Those standards require that we
plan and perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements.  An audit also includes assessing
the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation.  We believe that our audits provide a reasonable basis for
our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial
position of Redwood Entertainment Group, Inc. as of December 31, 2002, and
the consolidated results of its operations and its cash flows for the year
ended December 31, 2003 and for the periods from inception, August 13,
2002, to December 31, 2003 and 2002, in conformity with accounting
principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared
assuming that the Company will continue as a going concern.  As shown in
the financial statements and discussed in Note 2, the Company has incurred
significant recurring losses from operations since inception and is
dependent on outside sources of financing for continuation of its
operations.  These factors raise substantial doubt about the Company's
ability to continue as a going concern.  Management's plans with regard to
this matter are also discussed in Note 2.  These financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.


                                     /s/ Ham, Langston & Brezina, L.L.P.



May 5, 2004
Houston, Texas


                                    F-3

                     REDWOOD ENTERTAINMENT GROUP, INC.
                  (A CORPORATION IN THE DEVELOPMENT STAGE)
                         CONSOLIDATED BALANCE SHEET
                             December 31, 2003
                                 __________
<Table>
<Caption>

<S>                                                                          <C>
   ASSETS
   ------
Current assets:
  Cash and cash equivalents                                     $     6,973
                                                                -----------
   Total assets                                                 $     6,973
                                                                ===========

LIABILITIES AND STOCKHOLDERS' DEFICIT
-------------------------------------

Current liabilities:
  Note payable to a bank                                        $    60,000
  Note payable to stockholder                                        49,672
  Obligation under acquisition agreement                            180,490
  Accounts payable and accrued liabilities                           73,040
  Accounts payable assumed in recapitalization                      178,487
                                                                -----------
   Total current liabilities                                        541,689
                                                                -----------

Commitment and contingencies

Stockholders' deficit:
  Common stock, $.001 par value, 100,000,000 shares
   shares authorized, 55,479,684 shares issued and
   outstanding at December 31, 2003                                  55,479
  Additional paid-in capital                                      2,965,556
  Losses accumulated during the development stage               (3,555,751)
                                                                -----------

   Total stockholders' deficit                                    (534,716)
                                                                -----------

  Total liabilities and stockholders' deficit                   $     6,973
                                                                ===========



</Table>











                The accompanying notes are an integral part
                 of the consolidated financial statements.
                                    F-4

                     REDWOOD ENTERTAINMENT GROUP, INC.
                  (A CORPORATION IN THE DEVELOPMENT STAGE)
                    CONSOLIDATED STATEMENT OF OPERATIONS
          for the year ended December 31, 2003 and for the periods
       from inception, August 13, 2002, to December 31, 2003 and 2002
                                 __________
<Table>
<Caption>


                                                                     Inception
                                                Period Ended             to
                                                December 31,        December 31,
                                            2003          2002*         2003
                                        ------------  ------------  ------------
<S>                                     <C>           <C>         <C>
Interest income                          $        12   $      -      $        12
                                        ------------  ------------  ------------

Costs and expenses:
  Operating, general and administrative
   expenses, except consulting expense       240,353        76,968       317,321
  Stock-based compensation                 1,200,973     1,202,233     2,403,206
  Cost of recapitalization                         -       273,987       273,987
  Goodwill impairment                        541,101             -       541,101
  Interest expense                            17,498         2,650        20,148
                                        ------------  ------------  ------------
   Total costs and expenses                1,999,925     1,555,838     3,555,763
                                        ------------  ------------  ------------
   Net loss                             $(1,999,913)  $(1,555,838)  $(3,555,751)
                                        ============  ============  ============

Weighted average shares outstanding       26,162,366    13,995,873
                                        ============  ============
Net loss per common share
 - basic and diluted                    $     (0.08)  $     (0.33)
                                        ============  ============



</Table>




     *  The Company did not begin operations until August 13, 2002.
     Accordingly, the amounts shown do not represent a complete annual
     period.












                The accompanying notes are an integral part
                 of the consolidated financial statements.
                                    F-5

                     REDWOOD ENTERTAINMENT GROUP, INC.
                  (A CORPORATION IN THE DEVELOPMENT STAGE)
              CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT
       for the year ended December 31, 2003 and for the period from
              inception, August 13, 2002, to December 31, 2002
                                 __________
<Table>
<Caption>
                                                                Losses
                                                              Accumulated
                                      Additional              During the
                      Common Stock     Paid-In    Deferred    Development
                   Shares     Amount    Capital  Compensation   Stage        Total
                 ---------- --------- ----------  ----------- -----------  ----------
<S>             <C>        <C>       <C>         <C>         <C>          <C>
Balance at
 inception,
 August 13, 2002                $   -    $     -     $      -    $      -     $     -

Initial
 contribution to
 establish Energy
 Resource
 Management, Inc.       300         -      1,020            -           -       1,020

Recapitalization
 on August 26,
 2002            13,338,384    13,338   (13,338)            -           -           -

Common stock
 issued in
 exchange for
 consulting
 services         2,715,000     2,715  2,230,435  (1,030,917)           -   1,202,233

Net loss               -         -          -            -    (1,555,838) (1,555,838)
                 ---------- --------- ----------  ----------- -----------  ----------
Balance at
 December 31,
 2002            16,053,684   $16,053 $2,218,117 $(1,030,917)$(1,555,838)   (352,585)
                 ---------- --------- ----------  ----------- -----------  ----------
















</Table>

                The accompanying notes are an integral part
                 of the consolidated financial statements.
                                    F-6


                     REDWOOD ENTERTAINMENT GROUP, INC.
                  (A CORPORATION IN THE DEVELOPMENT STAGE)
              CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT
       for the year ended December 31, 2003 and for the period from
              inception, August 13, 2002, to December 31, 2002
                                 __________
<Table>
<Caption>
                                                                Losses
                                                              Accumulated
                                      Additional              During the
                      Common Stock     Paid-In    Deferred    Development
                   Shares     Amount    Capital  Compensation   Stage        Total
                 ---------- --------- ----------  ----------- -----------  ----------
<S>             <C>        <C>       <C>         <C>         <C>          <C>
Balance at
 December 31,
 2002            16,053,684  $ 16,053 $2,218,117 $(1,030,917)$(1,555,838)$  (352,585)

Consulting
 services
 recognized
 under
 consulting
 agreements               -         -          -    1,030,917           -   1,030,917

Common stock
 issued for
 cash            10,450,000    10,450    144,550            -           -     155,000

Common stock
 issued in
 exchange
 consulting
 services and
 for employee
 compensation     3,001,000     3,001    167,055            -           -     170,056

Common stock
 issued in
 exchange for
 extension of
 acquisition
 agreement          275,000       275      4,125            -           -       4,400

Common stock
 issued to a
 charitable
 Organization     5,700,000     5,700     85,500            -           -      91,200

Common stock
 issued to
 escrow for
 DreamCity
 acquisition     20,000,000    20,000    340,000            -           -     360,000

Interest imputed
 on loan from
 Stockholder              -         -      6,209            -           -       6,209

Net loss                  -         -          -            - (1,999,913) (1,999,913)
                 ---------- --------- ----------  ----------- -----------  ----------
Balance at
 December 31,
 2003            55,479,684 $  55,479 $2,965,556  $         -$(3,555,751)  $(534,716)
                 ========== ========= ==========  =========== ===========  ==========
</Table>

                The accompanying notes are an integral part
                 of the consolidated financial statements.
                                    F-7

                     REDWOOD ENTERTAINMENT GROUP, INC.
                                      (A CORPORATION IN THE DEVELOPMENT STAGE)
                    CONSOLIDATED STATEMENT OF CASH FLOWS
       for the year ended December 31, 2003 and for the periods from
         inception, August 13, 2002, to December 31, 2003 and 2002
                                 __________
<Table>
<Caption>
                                                                         Inception
                                                    Period Ended             to
                                                     December 31,        December 31,
                                                 2003          2002*         2003
                                             ------------  ------------  ------------
<S>                                         <C>           <C>         <C>
Cash flows from operating activities:
 Net loss                                    $(1,999,913)  $(1,555,838)  $(3,555,751)
 Adjustments to reconcile net loss to net
 cash used by operating activities:
  Impairment of goodwill                          541,101             -       541,101
  Cost of recapitalization                              -       273,987       273,987
  Amortization of deferred compensation         1,030,917     1,202,233     2,233,150
  Common stock issued for compensation            170,056             -       170,056
  Interest imputed on notes payable to
   stockholder                                      6,209             -         6,209
  Amortization of discount on long-term debt        3,789             -         3,789
  Changes in accounts payable and accrued
   liabilities                                    102,779        28,961       131,740
                                             ------------  ------------  ------------
   Net cash used by operating activities        (145,062)      (50,657)     (195,719)
                                             ------------  ------------  ------------
Cash flows from financing activities:
 Proceeds from stockholder advances                     -        49,672        49,672
 Payments on notes payable                        (3,000)             -       (3,000)
 Proceeds from sale of common stock               155,000         1,020       156,020
                                             ------------  ------------  ------------
   Net cash provided by financing activities      152,000        50,692       202,692
                                             ------------  ------------  ------------
Net increase in cash and cash equivalents           6,938            35         6,973

Cash and cash equivalents at beginning
 of period                                             35             -             -
                                             ------------  ------------  ------------
Cash and cash equivalents at end of period   $      6,973  $         35  $      6,973
                                             ============  ============  ============

</Table>


  *  The Company did not begin operations until August 13, 2002.
  Accordingly, the amounts shown do not represent a complete annual
  period.










                The accompanying notes are an integral part
                of these consolidated financial statements.
                                    F-8

                     REDWOOD ENTERTAINMENT GROUP, INC.
                  (A CORPORATION IN THE DEVELOPMENT STAGE)
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 __________

1.   Organization and Summary of Significant Accounting Policies
     -----------------------------------------------------------

     Redwood Entertainment Group Inc. (the "Company") is a Nevada
     Corporation that intends to acquire companies operating in the
     entertainment industry. The Company originally intended to engage in
     energy marketing and providing energy related products and services to
     commercial, industrial and manufacturing customers, as well as
     wholesale entities such as municipalities, rural electric co-ops and
     local distribution companies; however, a change in the Company's
     business plan was adopted (See Note 3).  The Company is considered a
     development stage enterprise because it currently has no significant
     operations, has not yet generated revenue from new business activities
     and is devoting substantially all of its efforts to business planning
     and the search for sources of capital to fund its efforts.

     The Company was originally incorporated as Energy Resource Management,
     Inc. on August 13, 2002 and subsequently adopted name changes to
     Redwood Energy Group, Inc. and Redwood Entertainment Group, Inc., upon
     completion of a recapitalization on August 26, 2002.  The re-
     capitalization occurred when the Company acquired the non-operating
     public shell of Gene-Cell, Inc.  Gene-Cell had no significant assets
     or operations at the date of acquisition and the Company assumed all
     liabilities that remained from its prior discontinued operation as a
     biopharmaceutical research company.  The historical financial
     statements presented herein are those of Redwood Entertainment Group,
     Inc. and its predecessors, Redwood Energy Group, Inc. and Energy
     Resource Management, Inc.

     The non-operating public shell used to recapitalize the Company was
     originally incorporated as Becniel and subsequently adopted name
     changes to Tzaar Corporation, Gene-Cell, Inc., Redwood Energy Group,
     Inc. and finally its current name, Redwood Entertainment Group, Inc.

     Significant Estimates
     ---------------------

     The preparation of consolidated financial statements in conformity
     with accounting principles generally accepted in the United States of
     America 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 dates of the consolidated
     condensed financial statements and the reported amounts of revenues
     and expenses during the periods.  Actual results could differ from
     estimates making it reasonably possible that a change in the estimates
     could occur in the near term.

     Principles of Consolidation
     ---------------------------

     The consolidated condensed financial statements include the accounts
     of the Company and its wholly owned subsidiaries after elimination of
     all significant intercompany accounts and transactions.



                                    F-9

                     REDWOOD ENTERTAINMENT GROUP, INC.
                  (A CORPORATION IN THE DEVELOPMENT STAGE)
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 __________

1.   Organization and Summary of Significant Accounting Policies, continued
     ----------------------------------------------------------------------
     Cash and Cash Equivalents
     -------------------------
     The Company considers all highly liquid short-term investments with an
     original maturity of three months or less when purchased, to be cash
     equivalents.

     Income Taxes
     ------------
     The Company uses the liability method of accounting for income taxes.
     Under this method, deferred income taxes are recorded to reflect the
     tax consequences on future years of temporary differences between the
     tax basis of assets and liabilities and their financial amounts at
     year-end.  The Company provides a valuation allowance to reduce
     deferred tax assets to their net realizable value.

     Stock-Based Compensation
     ------------------------
     Financial Accounting Standard No. 123, "Accounting for Stock-Based
     Compensation" ("SFAS No. 123") established financial accounting and
     reporting standards for stock-based employee compensation plans.  It
     defined a fair value based method of accounting for an employee stock
     option or similar equity instrument and encouraged all entities to
     adopt that method of accounting for all of their employee stock
     compensation plans and include the cost in the income statement as
     compensation expense.  However, it also allows an entity to continue
     to measure compensation cost for those plans using the intrinsic value
     based method of accounting prescribed by Accounting Principles Board
     ("APB") Opinion No. 25, "Accounting for Stock Issued to Employees".
     The Company accounts for compensation cost for stock option plans in
     accordance with APB Opinion No. 25.

     Loss Per Share
     --------------
     Basic and diluted net loss per share is computed on the basis of the
     weighted average number of shares of common stock outstanding during
     each period.  Potentially dilutive options that were outstanding
     during 2002 were not considered in the calculation of diluted earnings
     per share because the Company's net loss rendered their impact anti-
     dilutive.  Accordingly, basic and diluted loss per share were
     identical for the year ended December 31, 2003 and for the periods
     from inception, August 13, 2002, to December 31, 2003 and 2002.

     Fair Value of Financial Instruments
     -----------------------------------
     The Company includes fair value information in the notes to
     consolidated financial statements when the fair value of its financial
     instruments is different from the book value.  When the book value
     approximates fair value, no additional disclosure is made.

                               Continued
                                 F-10


                  REDWOOD ENTERTAINMENT GROUP, INC.
               (A CORPORATION IN THE DEVELOPMENT STAGE)
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                              __________

1.   Organization and Summary of Significant Accounting Policies,
     continued
     ------------------------------------------------------------
     Comprehensive Income
     --------------------
     The Company has adopted Statement of Financial Accounting
     Standards ("SFAS") No. 130, Reporting Comprehensive Income, which
     requires a company to display an amount representing
     comprehensive income as part of the Company's basic consolidated
     financial statements.  Comprehensive income includes such items
     as unrealized gains or losses on certain investment securities
     and certain foreign currency translation adjustments.  The
     Company's consolidated financial statements include none of the
     additional elements that affect comprehensive income.
     Accordingly, comprehensive income and net income are identical.

     New Accounting Pronouncements
     -----------------------------
     In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs
     Associated with Exit or Disposal Activities," which addresses
     financial accounting and reporting for costs associated with exit
     or disposal activities and supersedes Emerging Issues Task Force
     ("EITF") Issue No. 94-3, "Liability Recognition for Certain
     Employee Termination Benefits and Other Costs to Exit an Activity
     (including Certain Costs Incurred in a Restructuring)." SFAS
     No. 146 requires companies to recognize costs associated with
     exit or disposal activities when they are incurred rather than at
     the date of a commitment to an exit or disposal plan. In
     addition, SFAS No. 146 establishes that fair value is the
     objective for initial measurement of the liability. SFAS No. 146
     is effective for exit or disposal activities initiated after
     December 31, 2002, but early adoption is permitted. This adoption
     of this pronouncement did not have a material effect on the
     Company's financial condition or results of operations.

     In December 2002, the FASB issued SFAS No. 148, "Accounting for
     Stock Based Compensation", which amends SFAS No. 123 to provide
     alternative methods of transaction for an entity that voluntarily
     changes to the fair value method of accounting for stock based
     employee compensation.  It also amends the disclosure provisions
     of SFAS No. 123 to require prominent disclosure about the effects
     on reported net income of an entity's accounting policy decisions
     with respect to stock based employee compensation.  Finally, SFAS
     No. 148 amends APB Opinion No. 28, "Interim Financial Reporting",
     to require disclosure of those effects in interim financial
     statements.  SFAS No. 148 is effective for fiscal years ended
     after December 15, 2002, but early adoption is permitted.  The
     Company will continue to follow the provisions of APB Opinion No.
     25 in recognizing employee stock-based compensation; however, the
     Company began following the disclosure requirements of SFAS No.
     148 in January 2003.

                               Continued
                                 F-11


                   REDWOOD ENTERTAINMENT GROUP, INC.
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
                              __________

1.   Organization and Significant Accounting Policies, continued
     -----------------------------------------------------------
     New Accounting Pronouncements, continued
     ----------------------------------------
     In January 2003, the FASB issued FASB Interpretation (FIN) No. 46
     "Consolidation of Variable Interest Entities." FIN No. 46
     requires a company to consolidate a variable interest entity
     ("VIE") if the company has variable interests that give it a
     majority of the expected losses or a majority of the expected
     residual returns of the entity. Prior to FIN No. 46, VIEs were
     commonly referred to as SPEs. FIN No. 46 is effective immediately
     for VIEs created after January 31, 2003. This interpretation did
     not have a material effect on the Company's financial condition
     or results of operations.

     In April 2003, the FASB issued SFAS No. 149, Amendment to
     Statement No. 133 on Derivative Instruments and Hedging
     Activities. This statement amends and clarifies financial
     accounting and reporting for derivative instruments, including
     certain derivative instruments embedded in other contracts
     (collectively referred to as derivatives) and for hedging
     activities under SFAS No. 133. The changes in SFAS No. 149
     improve financial reporting by requiring that contracts with
     comparable characteristics be accounted for similarly. Those
     changes will result in more consistent reporting of contracts as
     either derivatives or hybrid instruments. SFAS No. 149 is
     effective for contracts entered into or modified after June 30,
     2003, except in certain instances detailed in the statement, and
     hedging relationships designated after June 30, 2003. Except as
     otherwise stated in SFAS No. 149, all provisions should be
     applied prospectively. The adoption of this statement did not
     have a material effect on the Company's financial condition or
     results of operations.

     In May 2003, the FASB issued SFAS No. 150, "Accounting for
     Certain Financial Instruments with Characteristics of both
     Liabilities and Equity." SFAS No. 150, which is effective at the
     beginning of the first interim period beginning after June 15,
     2003, must be implemented by reporting the cumulative effect of a
     change in accounting principle for financial instruments created
     before the issuance date of the statement and still existing at
     the beginning of the interim period of adoption. The statement
     requires that a financial instrument which falls within the scope
     of the statement to be classified and measured as a liability.
     The following financial instruments are required to be classified
     as liabilities: (1) shares that are mandatorily redeemable,
     (2) an obligation to repurchase the issuer's equity shares or one
     indexed to such an obligation and that requires or may require
     settlement by transferring assets and (3) the embodiment of an
     unconditional obligation that the issuer may or may not settle by
     issuing a variable number of equity shares if, at inception, the
     monetary value of the obligation is based on certain measurements
     defined in the statement. The adoption of this statement did not
     have a material effect on the Company's financial condition or
     results of operations.

                                 F-12
                  REDWOOD ENTERTAINMENT GROUP, INC.
               (A CORPORATION IN THE DEVELOPMENT STAGE)
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                              __________

2.   Going Concern Considerations
     ----------------------------
     The accompanying financial statements have been prepared assuming
     that the Company will continue as a going concern.  The Company
     is presently a shell company and has limited operations and
     resources.  The Company has accumulated net losses in the
     development stage of $3,555,751 for the period from inception,
     August 13, 2002, to December 31, 2003. Additionally, at December
     31, 2003, the Company is in a negative working capital and
     stockholders' deficit position of $534,716. Such matters raise
     substantial doubt about the Company's ability to continue as a
     going concern.  These financial statements do not include any
     adjustment that might result from the outcome of this
     uncertainty.

     Company management has plans that may include development into an
     independent multimedia entertainment company.  To this end,
     during the 2003, the Company entered into an agreement to acquire
     DreamCity Entertainment.   While the Company has, to date, been
     unable to fulfill all of its obligations under the agreement, the
     Company is working to renegotiate the terms of the agreement to
     allow it to go forward.  The Company believes the acquisition of
     DreamCity Entertainment would provide the Company a solid
     operation on which to implement its business plan. However, The
     Company's plan may require substantial amounts of capital.

     There can be no assurances that the Company will be able to raise
     adequate short-term capital to sustain its current operations as
     a development stage company, that the Company can raise adequate
     long-term capital from private placement of its common stock or
     private debt to emerge from the development stage  There can also
     be no assurances that the Company will ever attain profitability.
     The Company's long-term viability as a going concern is dependent
     upon certain key factors, as follows:

     -    The Company's ability to obtain adequate sources of funding
          to sustain it during the development stage.  Sources of
          funding may not be available on terms that are acceptable to
          the Company and existing stockholders, or may include terms
          that will result in substantial dilution to existing
          stockholders.

     -    The ability of the Company to ultimately achieve adequate
          profitability and positive cash flows to sustain its
          operations.




                                 F-13


                  REDWOOD ENTERTAINMENT GROUP, INC.
               (A CORPORATION IN THE DEVELOPMENT STAGE)
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                              __________

3.   Recapitalization
     ----------------
     On August 26, 2002, Gene-Cell, Inc. entered into an agreement and
     Plan of Reorganization (the "Agreement") whereby the Company
     agreed to acquire all of the issued and outstanding shares of
     Energy Resource Management, Inc. ("ERM") in exchange for
     4,000,000 restricted common shares.  The Agreement represented a
     re-capitalization of ERM with accounting treatment similar to
     that used in a reverse acquisition, except that no goodwill or
     intangible is recorded. A re-capitalization is characterized by
     the merger of a private operating company into a non-operating
     public shell corporation with nominal net assets and typically
     results in the owners and managers of the private company having
     effective or operating control after the transaction.  ERM, the
     private operating company, emerged as the surviving financial
     reporting entity under the Agreement, but Gene-Cell, Inc.
     remained as the legal reporting entity. The accompanying
     financial statements present the historical financial results of
     ERM.

     Subsequent to the recapitalization, the name of Gene-Cell, Inc.
     was changed to Redwood Energy Group, Inc. and then its current
     name, Redwood Entertainment Group, Inc.

     The consideration given by the Company in the recapitalization
     was approximately $274,000 and was achieved through the
     assumption of a note payable, accounts payable and accrued
     liabilities of the public shell.

4.   Acquisition of DreamCity Entertainment
     --------------------------------------

     On October 27, 2003, the Company Acquired DreamCity Entertainment
     from Michael Davis for $541,101. The purchase price was paid by
     issuing a total of 20,275,000 shares of the Company's common
     stock valued at $364,400 and two future cash payments of $100,000
     each, during the second quarter of 2004 and 2005. These payments
     represent long-term debt bearing no interest and, accordingly,
     the debt was issued at a discount. Following is an analysis of
     the assets acquired and the related purchase price of DreamCity
     Entertainment.

     Asset acquired   Goodwill                              $  541,101
                                                            ==========
     Analysis of purchase price
     Common stock   20,000,000 shares                       $  360,000
     Future cash payments treated as long-term debt            181,101
                                                            ----------
     Total purchase price                                   $  541,101
                                                            ==========


                                 F-14

                  REDWOOD ENTERTAINMENT GROUP, INC.
               (A CORPORATION IN THE DEVELOPMENT STAGE)
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                              __________

4.   Acquisition of DreamCity Entertainment, continued
     -------------------------------------------------
     At December 31, 2003, the Company was unable to demonstrate the
     continuing value of the Goodwill, because no reliable estimate of
     future cash flows could be substantiated and accordingly, the
     Company recorded a $541,101 impairment reserve to reduce goodwill
     to its estimated net realizable value.

5.   Note Payable to a Bank
     ----------------------
     Note payable to a bank at December 31, 2003 consists of amounts
     due under a $60,000 revolving line of credit, bearing interest at
     11.75% per year and due on demand.  This line of credit is
     collateralized by the guarantees of certain primary stockholders.
     This note was assumed in connection with the recapitalization of
     the Company.

6.   Note Payable to Stockholder
     ---------------------------
     Note payable to a stockholder represents advances made by a
     Robert Gower to allow the Company to meet certain obligations in
     the ordinary course of business. The note is on informal terms
     and bears no stated rate of interest; however, interest has been
     accrued at 12% per year, resulting in an increase in interest
     expense and additional paid-in capital of $6,209.

7.   Accounts Payable and Accrued Liabilities
     ----------------------------------------
     Accounts payable and accrued liabilities at December 31, 2002
     consists of the following:

     Accounts payable                                       $   67,307
     Accrued interest and other liabilities                      5,733
                                                            ----------
       Total                                                $   73,040
                                                            ==========

     Accounts payable assumed in the recapitalization of the Company
     represent trade payables of the public shell company that were
     assumed as a condition of the recapitalization. Such payables
     were incurred by Gene-Cell, Inc. prior to August 26, 2002.

8.   Income Taxes
     ------------
     The composition of deferred tax assets and the related tax
     effects at December 31, 2003 are as follows:

     Benefit from carryforward of net operating loss      $ 1,035,585
     Less valuation allowance                              (1,035,585)
                                                          ------------
       Net deferred tax asset                             $      -
                                                          ============

                               Continued
                                 F-15

                  REDWOOD ENTERTAINMENT GROUP, INC.
               (A CORPORATION IN THE DEVELOPMENT STAGE)
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                              __________

8.   Income Taxes, continued
     -----------------------

     The difference between the income tax benefit in the accompanying
     statement of operations and the amount that would result if the
     U.S. Federal statutory rate of 34% were applied to pre-tax loss
     for the year ended December 31, 2003 and the period from
     inception, August 13, 2002, to December 31, 2002 is as follows:
<Table>
<Caption>

                                                  2003                2002
                                           Amount   Percent    Amount   Percent
                                        ---------- --------- --------- ---------
       <S>                             <C>        <C>       <C>       <C>
       Benefit for income tax at
        federal statutory rate          $  679,970     34.0% $ 528,985     34.0%
       Non-deductible compensation       (408,331)    (20.4)  (408,759)    (26.3)
       Increase in valuation allowance    (87,665)     (4.4)   (27,071)     (1.7)
       Other                             (183,974)     (9.2)  (93,155)     (6.0)
                                        ---------- --------- --------- ---------
                                        $    -          -  % $    -         -  %
                                        ========== ========= ========= =========
</Table>

     At December 31, 2003, for federal income tax and alternative
     minimum tax reporting purposes, the Company has approximately
     $3,046,000 of unused net operating losses available for
     carryforward to future years.  The benefit from carryforward of
     such net operating losses will expire in various years between
     2011 and 2022.  The benefit from utilization of net operating
     loss carryforwards incurred prior to August 26, 2002 was
     significantly limited in connection with a recapitalization (See
     Note 3).  Such benefit could be subject to further limitations if
     significant future ownership changes occur in the Company.  The
     Company currently believes that a significant portion of its
     unused net operating loss carryforwards will never be utilized
     due to expiration or limitations on use due to ownership changes.

8.   Lease Commitments
     -----------------

     During the period from October 1, 2002 to December 31, 2002, the
     Company leased office space under a short-term operating sub-
     lease agreement. The lease expired on December 31, 2002 and has
     not been renewed. The Company is currently considering its
     facilities requirements and has not yet determined when an office
     space lease will be initiated. Rental expense for operating
     leases was $4,500 during the period from inception, August 13,
     2002, to December 31, 2002.

9.   Stockholders' Equity
     --------------------
     During the year ended December 31, 2003, and for the period from
     inception, August 13, 2002, to December 31, 2002, the Company
     engaged in various transactions affecting common stock as
     follows:
                               Continued
                                 F-16

                  REDWOOD ENTERTAINMENT GROUP, INC.
               (A CORPORATION IN THE DEVELOPMENT STAGE)
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                              __________

9.   Stockholders' Equity, continued
     -------------------------------

     Year ended December 31, 2003
     ----------------------------

     -    Effective March 3, 2003 the Company adopted a 3 to 1 forward
          stock split.  This stock split has been reflected in the
          accompanying financial statements on a retroactive basis and
          all references to shares outstanding, weighted average
          shares and earnings per share have been restated to reflect
          the split as if it had occurred at inception.

     -    In April 2003, the Company demanded return of 1,050,000
          shares of common stock, issued under the consulting
          agreements in 2002, as a result of nonperformance of
          services and failure by specific members of the Company's
          business development consulting team to fulfill specific
          contractual obligations to the Company.  The response to the
          Company's demand is not yet known.  The Company Board of
          Directors unanimously elected not to renew the consulting
          contracts entered into in 2002 and is currently conducting
          an investigation into relevant aspects of these consulting
          agreements.

     -    In June 2003, the Company negotiated an extension to its
          DreamCity acquisition agreement in exchange for 275,000
          shares of restricted common stock. This acquisition was
          completed in October 2003, under terms described in Note 4,
          upon issuance of an additional 20,000,000 shares.

     -    In September 2003 the Company issued 5,700,000 shares of
          common stock to New Creation Outreach, Inc., as a donation
          to support its ministries. New Creation Outreach is a
          related party because certain members of Company management
          and the board of directors are also officers in New Creation
          Outreach, Inc.

     -    At various dates in 2003, the Company sold 10,450,000 shares
          of its common stock at prices ranging from $0.01 to $0.02
          per share and received total proceeds of $155,000. These
          shares were sold under private placements exempt from
          registration.

     Inception to December 31, 2002
     ------------------------------

     -    On August 26, 2002 the Company entered into the
          recapitalization transaction under which the Company agreed
          to acquire all of the issued and outstanding common stock of
          Energy Resource Management, Inc. ("ERM") in exchange for
          4,000,000 shares of the Company's common stock (See Note 3).

                               Continued
                                 F-17

                  REDWOOD ENTERTAINMENT GROUP, INC.
               (A CORPORATION IN THE DEVELOPMENT STAGE)
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                              __________


9.   Stockholders' Equity, continued
     -------------------------------
     -    On August 26, 2002 and September 30, 2002 the Company
          entered into consulting agreements with five consultants for
          services related to business strategy and business
          development.  The consulting agreements have a term of two
          to three months and required the Company to issue 905,000
          shares of common stock valued at $2,232,150 based on the
          quoted market price on the dates of the transactions.  The
          transactions resulted in a charge to consulting expense of
          $1,202,233 for the period from inception, August 13, 2002,
          to December 31, 2002 and deferred compensation, presented as
          an increase in stockholders' deficit of $1,030,917, at
          December 31, 2002.

10.  Stock Options and Warrants
     --------------------------

     Gene-Cell, Inc., the public shell Company, used in the
     recapitalization (See Note 3) periodically issued incentive stock
     options to key employees, officers, and directors to provide
     additional incentives to promote the success of the Company's
     business and to enhance the ability to attract and retain the
     services of qualified persons.  The issuance of such options were
     approved by the Board of Directors.  The exercise price of an
     option granted was determined by the fair market value of the
     stock on the date of grant.

     The Company elected to follow Accounting Principles Board Opinion
     No. 25, "Accounting for Stock Issued to Employees" (APB 25) and
     related Interpretations in its accounting for employee stock
     options because, as discussed below, the alternative fair value
     accounting provided for under FASB Statement No. 123, "Accounting
     for Stock-Based Compensation", requires use of option valuation
     models that were not developed for use in valuing employee stock
     options.  Under APB 25, because the exercise price of the
     Company's employee stock options was greater than or equals the
     market price of the underlying stock on the date of grant, no
     compensation expense was recognized.

     At the time of the recapitalization, all stock options were fully
     vested and exercisable. Following is a summary of outstanding
     stock options at December 31, 2003:


                               Continued
                                 F-18

                  REDWOOD ENTERTAINMENT GROUP, INC.
               (A CORPORATION IN THE DEVELOPMENT STAGE)
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                              __________

<Table>
<Caption>
                                           Remaining
                                         Contractual
    Number of Shares  Expiration Date   Life (Years)    Exercise Price
    ----------------  ---------------   ------------    --------------
   <S>               <C>               <C>             <C>
                 693        July 2007            3.5            $10.83
               4,083        July 2007            3.5            $ 4.33
               3,462       March 2008            3.3            $21.67
                 375        June 2008            4.5            $21.67
                 375        June 2009            5.5            $21.67
                 387        June 2010            6.5            $21.67
               1,173       April 2011            7.3            $21.67
               1,020        June 2011            7.5            $21.67
              72,906      August 2011            7.6            $ 7.58
              98,307    February 2012            8.2            $ 4.33
              17,307    February 2012            8.2            $ 4.33
              94,614        July 2012            8.5            $ 1.08
    ----------------  ---------------   ------------    --------------
             294,702  Weighted average exercise price           $ 4.51
    ================                                    ==============
</Table>

     Gene-Cell also issued stock warrants to investors prior to the
     recapitalization, which remain outstanding at December 31, 2003.
     Based upon such issuances, at December 31, 2003 the Company has
     outstanding, warrants to acquire 90,231 shares of the Company's
     common stock at $43.33 per share.  These outstanding warrants are
     exercisable through November 2005.

11.  Related Party Transactions
     --------------------------

     During the year ended December 31, 2003, he Company issued
     5,700,000 shares of common stock to New Creation Outreach, Inc.,
     as a donation to support its ministries. New Creation Outreach is
     a related party because certain members of Company management and
     the board of directors are also officers in New Creation
     Outreach, Inc.

     As described in Note 6, at December 31, 2003, the Company has a
     not payable to a stockholder/former officer of the Company.

12.  Non-Cash Investing and Financing Activities
     -------------------------------------------

     On October 27, 2003, the Company Acquired DreamCity Entertainment
     from Michael Davis for $541,101. The purchase price was paid by
     issuing a total of 20,275,000 shares of the Company's common
     stock valued at $364,400 and the issuance of $181,000 of long-
     term debt. (See Note 4.)




                                 F-19

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

     None.

ITEM 8A.  CONTROLS AND PROCEDURES

     EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES.
     -------------------------------------------------
     The Company's Chief Executive Officer and Chief Financial Officer
has conducted an evaluation of the Company's disclosure controls and
procedures as of a date (the "EVALUATION DATE") within 90 days before
the filing of this annual report.  Based on their evaluation, the
Company's Chief Executive Officer and Chief Financial Officer have
concluded that the Company's disclosure controls and procedures are
effective to ensure that information required to be disclosed by the
Company in reports that it files or submits under the Securities
Exchange Act of 1934 is recorded, processed, summarized and reported
within the time periods specified in the applicable Securities and
Exchange Commission rules and forms.

     CHANGES IN INTERNAL CONTROLS AND PROCEDURES.
     --------------------------------------------
     Subsequent to the Evaluation Date, there were no significant
changes in the Company's internal controls or in other factors that
could significantly affect these controls, nor were any corrective
actions required with regard to significant deficiencies and material
weaknesses.

                               PART III

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

     The following table sets forth the Company's directors, executive
officers, promoters and control persons, their ages, and all offices
and positions held within EMPS.  Directors are elected for a period of
one year and thereafter serve until their successor is duly elected by
the stockholders and qualified.  Officers and other employees serve at
the will of the Board of Directors.

<Table>
<Caption>
Name             Age     Position                    Director or Officer Since
---------------  ----    -------------------------   -------------------------
<S>              <C>     <C>                         <C>
Brian R. Davis   50      Chairman of the Board of    January 1997
                         Directors, Interim CEO and
                         President

Kathy Procopio   48      CFO, Director               January 2003
                         Secretary, Treasurer

Mario Procopio   42      Director                    August 2003

Whitney Farmer*  39      Director                    January 2003

Michael Davis    40      Director, President of      May 2003
                         DreamCity Entertainment
</Table>

                                  36

     * Subsequent to the year ended December 31, 2003, Whitney Farmer
resigned as the Chief Executive Officer and Principal Financial
Officer of the Company.  Brian Davis will serve as the interim Chief
Executive Officer and President of the Company until such time as the
Board of Directors finds a suitable replacement for Ms. Farmer.  Kathy
Procopio has been appointed as Chief Financial Officer of the Company.

     The following sets forth certain biographical information
relating to the Company's Officers and Directors:

     BRIAN R. DAVIS, PH.D.  Dr. Davis is a co-founder of Gene-Cell.
From 1995 to 2000, Dr. Davis held the position of Associate Professor,
Department of Microbiology & Immunology Department of Internal
Medicine  and Senior Scientist, Sealy Center for Oncology & Hematology
at the University of Texas Medical Branch at Galveston. Prior to
joining UTMB, Galveston in 1995, Dr. Davis was a Visiting Scholar at
the Department of Molecular Microbiology & Immunology at the Johns
Hopkins School of Public Health in Baltimore Maryland (1994-1995) and
spent nine years as Scientist at the Institute of Cancer Research/
Geraldine Brush Cancer Research Institute in San Francisco, holding
the positions of Acting Director and Associate Director(1986-1995).
Dr. Davis received his A.B. summa cum laude from Harvard University in
1976, received his Ph.D. from California Institute of Technology in
1980, and conducted his postdoctoral training at the University of
California, Irvine from 1982-1986. Dr. Davis has an extensive list of
publications in the fields of hematopoiesis and retrovirology.

     MARIO PROCOPIO, TH. D.  Mario owned a financial services/asset
management company for the past twelve years which had grown to a
sales force of more than 60 licensed agents and 1,000 clients with
more than $ 10 million in assets under management.  Dr. Procopio is a
founder of a non-profit organization consisting of 107 licensed
ministers of which 44 of them are missionaries.  He oversees about 22
churches and 4,000 people who are affiliated with the ministry.  He
holds a Doctorate of Divinity and a Doctorate of Theology degree.  Dr.
Procopio currently co-hosts a half hour talk
show with Adelphia TV on local cable television.


     KATHY PROCOPIO,  TH.D.  Dr. Procopio has extensive experience in
financial services with 22 years in the marketplace.  Her background
includes working for Drexel Burnham Lambert stock brokerage in Mike
Milken's office as administrative supervisor and managing 60 sales
support staff.  Dr. Procopio provided executive oversight for a
billionaire heiress who provides financial services for high profile
clients.  Asset management for these portfolios was in excess of
$250,000,000.00 from approximately 50 different accounts.  For the
past 12 years, Dr. Procopio has been the owner of a branch of
Primerica, an asset management/financial services company.  She
recruited and trained a sales force that grew to over 60 licensed
agents representing nearly 1000 clients with approximately
$10,000,000.00 in assets under administration.


                                  37

     WHITNEY FARMER.  Ms. Farmer received her B.S. with honors and
M.B.A. from Western Washington University in Bellingham, Washington.
Originally a mortgage banker with Lynnwood Mortgage Corporation (now
Golf Savings Bank), her client base included a range from
builder/developer packaging to high risk first time homebuyers.  She
has served in executive volunteer/Board of Director capacities for the
American Heart Association, American Cancer Society, and Washington
State Omnibus Bill AIDS Task Force, and has launched three different
private sector internship programs in Washington State.  As a
consultant for ACT, Incorporated, she authored a Strategic Plan for
California State specifically addressing Los Angeles Unified School
District.  Her further consulting work in the greater Los Angeles area
has concentrated on integrating non-profit/educational/charitable
objectives with entertainment sector companies and foundations.
Immediately prior to beginning with Redwood Entertainment Group, Inc.,
Ms. Farmer was Vice President of Internal Development for Duke Media.
In this endeavor, she recruited capital and other resources for both
live action and animated projects, and developed public/private
partnerships domestically and internationally.

     MICHAEL DAVIS, PH.D.  Mr. Davis is an artist, entrepreneur,
educator, and mentor.  Originally an illustrator, Mr. Davis graduated
from the High School of Art and Design and subsequently Pratt
University.  His clients have included CBS, NBC, Nike, Smirnoff,
Marvel, and DC Comics.  He was the Artistic Director of the Art
Carnival at the Museum of Modern Art in New York City.  Through that
program and his mentor program, his students are representative of who
would become the most highly regarded professionals in animation,
comics, and illustration.  He was selected as the first to illustrate
ETC, the first project of Piranha Press of DC Comics.  In cooperation
with three other partners, Mr. Davis co-founded Milestone Media.
Milestone was sold in a distribution deal to Time-Warner in what was
at the time the first ever done by Time-Warner with a Black-owned
company.  Since its debut in 1993, Milestone has sold over 10 million
copies worldwide of its publications featuring a universe of
multicultural characters and making it the biggest Black comic book
publisher in the world.  One of the Milestone properties, "Static
Shock!", became the hit WBKids television show which for the last
three years has usually captured a #1 viewership ranking and was
nominated for two 2002 and 2003 Emmys.  It won the Emmy for Best Music
in 2004.  After selling Milestone, Mr. Davis was recruited as
President/CEO of Motown Film and Animation, a new venture of Motown
Records wherein Mr. Davis reported directly to Jeryl Busby, President
of Motown, and Clarence Avant, Chair of Motown.  As CEO, Michael
created and placed into development shows at Disney, ABC, Fox, and
Nickelodeon.  As an educator, Mr. Davis created Action Files for Simon
& Schuster, at the time the only comics-based curriculum reading
program taught in any school system.  His mentor program was
recognized with proclamations from the cities of Los Angeles, New
York, and East Orange.  Mr. Davis created the Magic Media reading
program, a joint venture with Magic Johnson Enterprises and RKO Magic,
a joint venture with of Magic Johnson Entertainment and RKO Pictures
that reinterprets the historic catalog of RKO intellectual properties
for the modern urban multicultural market.   As a speaker, Mr. Davis
has been the keynote speaker for the New York United Federation of Art
Teachers and the Federal Bureau of Investigation.  In 1997, Mr. Davis
was named Mentor of the Year by  Mentor magazine.  He has been
profiled in Black Enterprise magazine, the New York Daily News, the
New York Times, and by CNN, The Today Show, MTV, and BET.  In 1997,
the Stockton School in East Orange, New Jersey (a k-6 magnet school
for film, television, animation, and radio, renamed the Gordon Parks
School), renamed their auditorium The Michael Davis Auditorium.  In
2004, Mr. Davis was awarded a Ph.D. from the Hollywood Institute of
Production.
                                  38
Dependence Upon Key Personnel
-----------------------------

     The Company's ability to achieve success will depend, in part,
upon its ability to attract and retain highly qualified people in the
various areas of management while maintaining relationships with
leading sector identities.  Michael Davis, President of DreamCity is
working toward achieving the revenue generating goals of the firm.
Loss of his services would significantly impair the Company's ability
to be successful in the entertainment industry.  The Company carries
no key man life insurance binder until such a time that sufficient
operational capital is secured to provide for this coverage.

Family Relationships
--------------------

     Mario Procopio and Kathy Procopio are husband and wife.  As a
clarification, the Michael Davis who is a member of the Board of
Directors and President of DreamCity Entertainment is a different
individual from former Gene-Cell Board member Michael R. Davis,
brother to current Board Chair and interim CEO and President Dr. Brian
R. Davis.

COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

     Directors and executive officers are required to comply with
Section 16(a) of the Securities Exchange Act of 1934, which requires
generally that such persons file reports regarding ownership of and
transactions in securities of the Company on Forms 3, 4, and 5.  A
Form 3 is an initial statement of ownership of securities.  Form 4 is
to report changes in beneficial ownership and Form 5 covers annual
statement of changes in beneficial ownership, which is due 45 days
after the fiscal year end of the Company.

     Based solely on a review of Forms 3, 4 and 5 and amendments
thereto furnished to the Company during its most recent fiscal year,
it appears that certain reports were not timely filed.


ITEM 10. EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

     The following table sets forth information regarding the
compensation for the years ended December 31, 2003, 2001 and 2000,
with respect to the Chief Executive Officer and any other highly
compensated executive officers whose total annual salary and bonus
during 2003 exceeded $100,000 (collectively, the "Named Executive
Officers").


                                  39

<Table>
<Caption>
                                                                   Long Term
                                    Annual Compensation       Compensation Awards
                   ------------------------------------------ ------------------
                                              Other           Securities     All
Name and                                     Annual Restricted     Under   Other
Principal                                    Compen      Stock     lying  Compen
Position           Year    Salary   Bonus    sation     Awards   Options  sation
--------------------------------------------------------------------------------
<S>                <C>    <C>      <C>       <C>    <C>        <C>       <C>
Whitney Farmer
Former Chairperson,
Chief Executive
Officer, Chief
Financial
Officer and
Director           2003   $25,076  $  -0-    $  -0-  1,150,000       -0-    $-0-

Brian Davis
Interim  Chief
Executive Officer  2003  $    -0-    $-0-       -0-    400,000       -0-    $-0-
and President      2002  $    -0-    $-0-       -0-              86,498*    $-0-
and Director       2001  $178,000    $-0-       -0-               8,569     $-0-

Michael Davis
Director,
President of
DreamCity
Entertainment      2003  $24,399     $-0-       -0-    67,5000       -0-    $-0-
                                                            **
Kathy Procopio
Chief Financial
Officer,
Secretary,
Treasurer and
Director           2003      $-0-    $-0-       -0-    200,000       -0-  $1,000
                                                           ***
Mario Procopio
Director           2003      $-0-     -0-       -0-  5,500,000       -0- $14,625
                                                          ****

</Table>
*    These options were granted as reimbursement for expenses accrued
     on behalf of the Company by Dr.    Davis. The value of these
     shares upon is estimated as 26,615 at a value of $3.25 per share.
**   Excludes 20,000,000 shares issued for purchase of DreamCity
     Entertainment.
***  These shares were issued to New Creation Outreach as a donation
     to support its ministries.
**** These shares were issued to New Creation Outreach as a donation
     to support its ministries.

COMPENSATION OF DIRECTORS

     During 2003, the Company had in place an agreement to pay its
directors $500 per month in stock, or a combination of stock and cash.
This agreement was taken under review by the board of directors in
March 2004 and no payments have been made to directors since that
time.

EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE IN
CONTROL ARRANGEMENT

     None.

                                  40

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
          MANAGEMENT

     The following table sets forth, as of March 24, 2004, the number
of shares beneficially owned and percent of the Common Stock held by:
(i) each director and director nominee of Redwood Entertainment Group,
Inc., (ii) the Chief Executive Officer, (iii) the other executive
officers named in the Summary Compensation Table set forth under
"Executive Compensation", and (iv) all current executive officers and
directors of Redwood Entertainment Group, Inc. as a group. Under the
rules of the Securities and Exchange Commission ("SEC"), a person is
deemed to own beneficially all securities as to which that person owns
or shares voting or investment power, as well as all securities which
such person may acquire within 60 days through the exercise of
conversion rights or options. Each person named in the table below has
sole voting and investment power with respect to the shares indicated,
except as otherwise stated in the notes to the table.

<Table>
<Caption>

                                  Number of Shares       Percentage of
Beneficial Owner            Beneficially Owned (1)        Common Stock
----------------------------------------------------------------------
<S>                                  <C>                 <C>
Whitney Farmer                          1,150,000                 1.9%
Brian Davis                               567,955                 1.0%
Michael Davis                          20,675,000                34.6%
Kathy Procopio*                        12,650,000                20.8%
----------------------------------------------------------------------
All directors and executive officers
as a group (6 persons)                 35,042,955                57.7%
----------------------------------------------------------------------
</Table>

     * The shares shown as beneficially owned by Kathy Procopio are
held of record by Cyrus Project Incorporated and New Creation
Outreach.  Kathy Procopio is the President of both Cyrus Project
Incorporated and New Creation Outreach and therefore may be determined
to be the beneficial owner of those shares.  Mario Procopio is a non-
officer director of both entities.

STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

     As of March 24, 2004, the persons named below were, to our
knowledge, the only beneficial owners of more than 5% of the
outstanding Common Stock, determined in accordance with Rule 13d-3 of
the Securities Exchange Act of 1934, other than directors and
executive officers whose beneficial ownership is described in the
above table.


                                  41

<Table>
<Caption>

                                  Number of Shares       Percentage of
Beneficial Owner            Beneficially Owned (1)        Common Stock
----------------------------------------------------------------------
<S>                                   <C>                 <C>
Cyrus Project Incorporated*
P.O. Box 1969
Huntington Beach, CA 92647               6,950,000               11.6%

New Creation Outreach*
1414 E. Katella Avenue
Anaheim, CA 92805                        5,700,000                9.5%

Total                                   12,650,000               20.8%
----------------------------------------------------------------------
</Table>

     * Kathy Procopio is the President of both Cyrus Project
Incorporated and New Creation Outreach and therefore may be determined
to be the beneficial owner of those shares.  Mario Procopio is a non-
officer director of both entities.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     In September 2003, the Company issued 5,700,000 shares of common
stock to New Creation Outreach as a donation to support its
ministries.  This donation was made in lieu of payment of consulting
and other fees due Mario Procopio and Kathy Procopio for services
rendered to the Company during 2003.  Kathy Procopio, the Company's
CFO and a director, is the President of New Creation Outreach. Mario
Procopio also holds a non-officer director position in New Creation
Outreach.

     On October 27, 2003, the Company finalized the acquisition of
DreamCity Entertainment by issuing 20,275,000 restricted shares of
common stock to Michael Davis, the sole shareholder and president of
DreamCity Entertainment.  Mr. Davis is a Company director.

The Company believes that each of the above-described transactions is
at least as favorable to the Company as those available on an arms-
length basis.  As with the above transactions, all future material
transactions entered into between the Company and affiliated entities
or parties will be on terms no less favorable to the Company than can
be obtained from unaffiliated parties and will not be entered into or
terminated except on the affirmative vote of a majority of the
disinterested directors.



                                  42

ITEM 13.       EXHIBITS AND REPORTS ON FORM 8-K

(a)  Reports on Form 8-K

          None.

(b) Exhibits.  The following exhibits are included as part of this
               report:

     Exhibit 10.1   Consulting Agreement

     Exhibit 14.1   Code of Ethics for Principal executive and senior
                    financial officers

     Exhibit 31.1   Certification of Principal Executive Officer
                    Pursuant to Section 302 of the Sarbanes-Oxley Act
                    of 2002
     Exhibit 31.2   Certification of Principal Financial Officer
                    Pursuant to Section 302 of the Sarbanes-Oxley Act
                    of 2002

     Exhibit 32.1   Certification of Principal Executive Officer
                    Pursuant to Section 906 of the Sarbanes- Oxley Act
                    of 2002.

     Exhibit 32.2   Certification of Principal Financial Officer
                    Pursuant to Section 906 of the Sarbanes- Oxley Act
                    of 2002.

ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES

AUDIT FEES

     The fees billed for services by Ham, Langston & Brezina, L.L.P.
during 2003 and 2002 related to the financial statement audits and
reviews of quarterly financial statements filed in the reports on
Form 10-QSB totaled $21,427 and $17,500, respectively.

AUDIT-RELATED FEES

     Ham, Langston & Brezina, L.L.P. did not bill the Company for
audit-related services during 2002 and 2003.

TAX FEES

     Ham, Langston & Brezina, L.L.P. did not bill the Company for
income tax consulting services during 2003 and 2002, respectively.

ALL OTHER FEES

     Ham, Langston & Brezina, L.L.P. did not bill the Company other
fees during 2002 and 2003.


                                  43

                              SIGNATURES

     In accordance with Section 12 of the Securities Exchange Act of
1934, the registrant caused this registration statement to be signed
on its behalf, thereunto duly authorized.


                         Redwood Entertainment Group, Inc.


May 17, 2004             By: /S/ Brian R. Davis
                         ----------------------------------
                         Brian R. Davis, Interim Chief Executive
                         Officer and President



May 17, 2004             By: /S/ Kathy Procopio
                         ----------------------------------
                         Kathy Procopio, Chief Financial Officer










                                  44