SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                 F O R M 10-KSB

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

                      FOR THE YEAR ENDED DECEMBER 31, 2003

                         COMMISSION FILE NUMBER 1-12635
                             ----------------------

                      PARADISE MUSIC & ENTERTAINMENT, INC.
           (Name of Small Business Issuer as specified in its charter)

         DELAWARE                                        13-3906452
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)

122 EAST 42ND STREET, NEW YORK, NEW YORK               10168
(Address of principal executive offices)             (Zip Code)

         ISSUER'S TELEPHONE NUMBER, INCLUDING AREA CODE: (888) 565-3259

SECURITIES REGISTERED UNDER SECTION 12(B) OF THE EXCHANGE ACT:

 Title of each class                   Name of Each Exchange on Which Registered
-----------------------                -----------------------------------------
Common Stock, par value                             Over-the-counter
   $0.01 per share

SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE EXCHANGE ACT:  None

Check  whether  the issuer  (1) has filed all  reports  required  to be filed by
Section 13 or 15(d) of the Securities  Exchange Act of 1934 during the preceding
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 |_|    No |X|

Check if 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 issuer's
knowledge,  in  definitive  proxy  or  information  statements  incorporated  by
reference in Part III of this Form 10-KSB or any  amendment to this Form 10-KSB.
|X|

The issuer had no revenues for the year ended December 31, 2003.

The  aggregate  market  value of voting and  non-voting  common  equity  held by
non-affiliates of the issuer on June 28, 2004 was approximately  $2,000,000.  On
such date,  the last sale price of issuer's  common stock was $0.05.  Solely for
the  purposes  of this  calculation,  shares  beneficially  owned by  directors,
officers and beneficial  owners of in excess of 10% of the  registrant's  common
stock have been  excluded,  except  shares  with  respect to which such  persons
disclaim   beneficial   ownership.   Such  exclusion  should  not  be  deemed  a
determination  or  admission  by  registrant  that such  persons  are,  in fact,
affiliates of registrant.

As of June 28, 2004 there were 58,496,358 shares of common stock outstanding.

                    DOCUMENTS INCORPORATED BY REFERENCE: None

Transitional Small Business Disclosure Format (check one)      Yes |_|    No |X|


<PAGE>


                                     PART I

The statements contained in this Annual Report that are not historical facts are
forward-looking  statements.  Such forward-looking  statements may be identified
by,  among  other  things,  the  use  of  forward-looking  terminology  such  as
"believes,"  "expects," "may," "will," "should" or "anticipates" or the negative
thereof or other variations thereon or comparable terminology, or by discussions
of  strategy  that  involve  risks  and  uncertainties.   These  forward-looking
statements involve predictions.  Our actual results, performance or achievements
could  differ  materially  from the results  expressed  in, or implied by, these
forward-looking statements.  Potential risks and uncertainties that could affect
our future operating results include,  but are not limited to, our need to raise
additional capital, our history of losses, the high-risk nature of the music and
entertainment  business and our dependence on some large  customers,  as well as
economic conditions.

ITEM 1. DESCRIPTION OF BUSINESS

GENERAL

Paradise Music & Entertainment, Inc. (PDSE) is a music and entertainment company
focused on partnering  with other  companies to build their  brands.  We utilize
music and events to marry marketing, technology and entertainment to connect our
customers  with their  consumers.  Our  strategy  is to market  sponsor-targeted
entertainment projects,  including the development and production of proprietary
festivals, events and branding campaigns for corporate clients.

Prior to 2002, we  discontinued  all our other  operating  areas to focus on our
core business, as described above. Consequently,  we have a very limited history
with respect to our current business operations. During 2003, our main focus was
reestablishing  compliance  with SEC  reporting  obligations,  implementing  new
accounting controls and procedures,  and settling litigation as described below.
We now focus on music events, an area that  incorporates our core  competencies.
We currently have one remaining operating  subsidiary,  All Access Entertainment
Management Group, Inc., through which we conduct our music events.

To date,  our  involvement  with music events has not required that we apply for
governmental permits, however in the future we may be required to do so.

We were  incorporated  in the State of Delaware on July 18, 1996.  Our principal
executive  offices are located at 122 East 42nd Street,  New York, NY 10168, and
our telephone number is 888-565-3259.


COMPETITION

We face intense  competition  both for business and for talent,  executives  and
operating personnel. Our music events operations compete with businesses ranging
from single  proprietors  in local areas to the SFX  division of Clear  Channel.
There are over 1,000 music  festival  events in the United  States each year and
hundreds of organizers  and  producers.  Our  sponsorship  and media  operations
compete with a similarly  crowded field,  from local media and sponsor marketers
to the large advertising firms.

EMPLOYEES/INDEPENDENT CONTRACTORS

During 2003, we had three executive  officers and no other full-time  employees.
Mr. Kelly Hickel continues as Chairman of the Board.  Mr. Richard  Rifenburgh is
Vice Chairman and a member of the Board of Directors.  Mr. Winston Willis serves
as a member of the Board of  Directors  and  heads our music  event  initiative.
These individuals serve under informal consulting agreements. Other services are
provided on a consulting basis as needed. As is customary in the music business,
we also  utilize  the  services of artists,  performers,  composers,  producers,
engineers,  roadies,  booking agents and others who are independent contractors.
These independent  contractors hire out their services on an as needed basis and
receive a set fee for the services.  The services performed by these independent
contractors  are not  needed on a full time  basis.  As a  result,  services  of
independent  contractors  are less  expensive  than having  full time  employees
perform these services.

<PAGE>


ITEM 2. DESCRIPTION OF PROPERTY

We utilize space occupied by Total  Communications  Group, Inc. in New York City
at 122 E. 42nd Street.  We use the space on a periodic basis,  but we do not pay
rent.

ITEM 3. LEGAL PROCEEDINGS

     o    The dispute with Craig Rodgers, former president of a subsidiary,  was
          settled on April 15, 2003.  Pursuant to the Settlement  Agreement,  we
          are required to make two payments of $12,500 each to Mr. Rodgers.  The
          first such payment was to be made on or before June 10, 2003,  and the
          second  payment was due on or before  August  10,  2003.  While  these
          payments  have  not yet  been  made,  they  were  provided  for in the
          liabilities for discontinued  operations  section on the balance sheet
          for fiscal year 2001.

     o    Cast & Crew Entertainment Services, Inc. brought a claim against us in
          Superior  Court,  County of Los  Angeles,  for unpaid  invoices in the
          amount of  approximately  $805,000.  Though  neither side admitted any
          wrongdoing,  this dispute was settled on November 13, 2003.  The terms
          of the  settlement  are for the  Company to pay the sum of $250,000 by
          December 31, 2003. In addition,  the Company  agreed to issue warrants
          to the  Plaintiff to purchase  three  million  shares of the Company's
          common stock at $0.15 per share.  These liabilities have been provided
          for on the balance sheet for fiscal year ending 2002.

     o    Several vendors obtained  judgments against us from New York Courts in
          the aggregate amount of  approximately  $60,000 for unpaid fees. These
          charges have been  provided for in the  liabilities  for  discontinued
          operations  section on the balance  sheet.  The Company has no further
          information regarding these proceedings.

     o    On August 13,  2001,  8330 West Third  Street,  LLC filed a  complaint
          against Straw dogs, Inc, a subsidiary of the Company,  in the Superior
          Court of California,  County of Los Angeles,  alleging that Straw Dogs
          breached various obligations under its lease dated August 1, 1998. The
          suit seeks damages, including but not limited to past due rent, in the
          amount of  approximately  $59,000,  attorneys  fees, and certain other
          fees  and  taxes.   These  charges  have  been  provided  for  in  the
          liabilities for discontinued  operations  section on the balance sheet
          for  fiscal  year  2001.  No  further  action  has  been  taken by the
          plaintiff in this matter.

Settlement of any  outstanding  claim may be predicated on our ability to secure
capital  funding.  Unfavorable  resolution  of these  claims is likely to have a
material  adverse  impact on our financial  condition.  If a judgment is entered
against us with respect to one or more of these claims,  we may be unable to pay
such judgment.



<PAGE>


                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market Information:

 Our common  stock  traded on the Nasdaq  SmallCap  Market and the Boston  Stock
Exchange from January 22, 1997 through  March 29, 2002 under the symbols  "PDSE"
and "PMU,"  respectively.  Beginning  May 2002,  our shares began trading on the
"pink  sheets"  inter-dealer  market.  The high and low bid prices of our common
stock (as  reported by Nasdaq  (and,  after May 2002,  the pink  sheets) were as
follows:


                    PERIOD                       HIGH              LOW


2003          01/01/03 - 03/31/03                $0.005            $0.001
              03/31/03 - 06/30/03                $0.020            $0.001
              07/01/03 - 09/30/03                $0.009            $0.002
              10/01/03 - 12/31/03                $0.017            $0.002


2002          01/01/02 - 03/31/02                $0.090            $0.010
              04/01/02 - 06/30/02                $0.080            $0.001
              07/01/02 - 09/30/02                $0.030            $0.001
              10/01/02 - 12/31/02                $0.015            $0.001



At this time we are  unable to obtain  the range of high and low bid  prices per
share of our common stock on the Boston Stock Exchange for periods after 2000.

The  approximate  number of holders  of record of our common  stock was 93 as of
December  31,  2003.  We  believe  that  there  are in  excess  of 500 round lot
beneficial owners of common stock whose shares are held in street name.

We have never paid a dividend on our common  stock.  We  anticipate  that future
earnings,  if  any,  will  be  retained  for use in our  business  or for  other
corporate purposes and we do not anticipate paying cash dividends.


RECENT SALES OF UNREGISTERED SECURITIES

During the  fiscal  year  ended  December  31,  2003,  we issued  the  following
securities  which  were not  registered  under the  Securities  Act of 1933,  as
amended:  (i)  3,850,000  shares  issued  in 2003 to  consultants  for  services
rendered  in 2002 were  valued at $15,400  and were  accrued in  operations  for
fiscal year 2002; and (ii) warrants  authorized  subsequent to December 31, 2002
through December 31, 2003 as outlined in the following table:

<TABLE>
<CAPTION>

SECURITIES          DATE SOLD    PURCHASER        CONSIDERATION        EXEMPTION         TERMS OF          USE OF
SOLD                                                                   CLAIMED           CONVERSION        PROCEEDS
                                                                                         OR EXERCISE

<S>                  <C>         <C>              <C>                  <C>               <C>               <C>
Warrants to         December     One Private      Purchase of          Section 4 (2)     Exercisable at    Working
Purchase            1, 2003      Investor         $14,500              And Rule 506      a price of        Capital
333,250 shares                                    Aggregate            Of                $0.002 per
of common                                         principal            Regulation D.     share
stock                                             Amount of
                                                  Promissory
                                                  notes
</TABLE>


<PAGE>



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

INTRODUCTION

We market sponsor-targeted entertainment projects, including the development and
production of proprietary festivals, events and branding campaigns for corporate
clients.

RESULTS OF OPERATIONS

Year Ended December 31, 2003 Compared to Year Ended December 31, 2002

In the  aggregate,  revenues  from  continuing  operations  for the  year  ended
December  31,  2003,  were zero,  as  compared  to  $163,000  for the year ended
December  31,  2002.  This  decrease  of  $163,000  was  due  primarily  to  the
restructuring  phase Paradise went through in 2003. The loss before discontinued
operations and extraordinary items in 2003 was $97,202 compared to a loss before
discontinued  operations  and  extraordinary  items of $1,861,000 in 2002.  This
decrease of 1,763,798 was also due to the restructuring phase.

PDSE Music  revenues were zero for the year ended December 31, 2003, as compared
to $40,000 for the year ended December 31, 2002. The decrease in revenues is due
to the termination of the music joint ventures and the cessation of new releases
by Label M.

PDSE Festival & Events  revenues were zero for the year ended December 31, 2003,
compared to $163,000 for the year ended  December 31, 2002. The decrease was due
to the restructuring phase the Company went through in 2003.

Paradise's marketing,  selling, general and administrative expenses decreased to
$7,218 for the year ended December 31, 2003,  from $1,795,000 for the year ended
December 31, 2002, a decrease of  $1,787,782.  The decrease was due primarily to
the restructuring phase of the Company in 2003.

Net interest expense was $89,985 for the year ended December 31, 2003,  compared
to $225,000 for the year ended  December  31,  2002, a decrease of $135,015,  or
60%.  The  decrease is the result of the  restructuring  of the senior note with
Porter Capital Corporation.

LIQUIDITY AND CAPITAL RESOURCES

Net cash used in operating  activities for the year ended December 31, 2003, was
$145,574.

Net cash provided by financing  activities for the year ended December 31, 2003,
was $133,692,  which is  substantially  represented  by proceeds from  mezzanine
financing  arrangements.  We had  negative  working  capital  of  $12,000  and a
stockholders'  deficit of  $7,496,783  at December  31, 2003.  We are  currently
negotiating  with various  lenders,  strategic  partners and equity investors to
assist in meeting our short-term cash flow needs.

We believe we do not have available  funds  sufficient to sustain our operations
through the fourth quarter of 2004.  Our available  funds  generally  consist of
cash  and the  funding  derived  from  our  revenue  sources:  music  event  and
sponsorship revenues and record label revenues.  As of December 31, 2003, we had
$5,099 in available cash.  Reducing operating expenses and capital  expenditures
alone will not be sufficient to solve our liquidity problems. Unless we are able
to obtain  sufficient  funding  through  equity or debt offerings we will not be
able to continue as a going  concern.  We need to raise funds through  equity or
debt offerings in order to survive. Such financing may not be available on terms
favorable to us, or at all. Even if we are able obtain  additional  financing it
may not be sufficient to maintain our current operations.

Paradise has a commercial financing agreement with Porter Capital Corporation
(PCC.) The  agreement  provides that the Company  sell,  transfer,  set over and
assign certain  invoices and accounts  receivable to the lender,  with recourse.
The credit facility provides for maximum  revolving  borrowings up to $1,500,000
and is  collateralized  by a UCC-1 filing on certain of the Company's assets. As
of December 31, 2003, the outstanding advance balance,  including interest,  was
approximately $300,000.  Advances from the lender bear interest at the higher of
10.5% per annum or the prime rate plus 2.50%.

<PAGE>

As of October 10, 2003,  PCC's Senior Loan  balance due was  $607,351.45  due to
accrued  interest,  finance  charges and minimum monthly fees. On April 12, 2004
PCC  agreed to reduce  the  Principal  Amount  due  under the  Senior  Line from
$607,351.45  to  $300,000.  Further,  the Senior Loan balance will now be due on
April 15, 2005 and will not bear  interest  until after its  maturity  date,  at
which time the  interest  will be payable  monthly at the rate of 18% per annum.
The loan  balance will be paid down out of the proceeds of the sale of the stock
held by PCC.

On April 12, 2004,  PCC agreed to extend to Paradise a new line of credit in the
amount of five  million  dollars  upon its normal  business  terms for  accounts
receivable financing for the purposes of acquisitions by Paradise.

NEW MEZZANINE LOANS

On April 12, 2004, PCC agreed to provide forty thousand  dollars  ($40,000) as a
secured loan for two years at an interest rate of 10% per annum. The interest is
payable quarterly in arrears,  in cash or stock, at the lenders option. PCC will
receive  warrants to purchase  500,000  shares of Paradise's  common stock at an
exercise price of $0.002 per share. The warrants expire four years from the date
of issuance. This loan was provided for the company's working capital needs. All
of these funds have already been advanced to the company.

On April 12, 2004, MME, Inc. agreed to provide eighty thousand dollars ($80,000)
as a  secured  loan for two  years at an  interest  rate of 10% per  annum.  The
interest  is payable  quarterly  in  arrears,  in cash or stock,  at the lenders
option.  MME, Inc.  will receive  warrants to purchase  1,000,000  shares of the
company's  stock at an exercise price of $0.002 per share.  The warrants  expire
four years from the date of issuance.  This loan was provided for the  company's
working capital needs.  Sixty-five thousand dollars has already been advanced to
the company.

On April 12, 2004, MME, Inc. agreed to provide up to an additional eight hundred
and eighty  thousand  ($880,000)  as a secured loan for two years at an interest
rate of 10% per annum. The interest is payable quarterly in arrears,  in cash or
stock, at the lenders option.  F&C will receive  warrants to purchase  9,614,009
shares of the  company's  stock at an  exercise  price of $0.002 per share.  The
warrants  expire  four  years  from the  date of  issuance.  This  loan is being
provided for the company's  working capital needs and to fund  acquisitions  for
Paradise.

RISK FACTORS

We have a history of  losses,  we expect  more  losses in the future and we have
substantial  doubt  regarding our ability to continue as a going concern.  Since
our inception,  we have never been profitable.  We cannot predict when, if ever,
we will  achieve  profitability.  For the years ended  December  31,  2003,  and
December 31, 2002, we had net losses of $97,202 and $1,838,000, respectively. We
have substantially  decreased our business operations and we have minimal income
from our operating divisions and subsidiaries.  We presently have limited credit
facilities  and we are in default on several  loan  instruments.  These  factors
raise substantial doubt about our ability to continue as a going concern, and it
is  unlikely  that we will  report net income in any future  year or period.  In
addition,  the notes to our financial statements for the year ended December 31,
2003,  contain an explanatory  paragraph  regarding our ability to continue as a
going concern.

We believe we do not have available  funds  sufficient to sustain our operations
through the fourth quarter of 2004.  Our available  funds  generally  consist of
cash and the funding derived from our revenue  sources:  income related relating
to music  festivals.  As of December 31, 2003, we had $5,099 in available  cash.
Reducing  operating  expenses  and  capital   expenditures  alone  will  not  be
sufficient  to solve  our  liquidity  problems.  Unless  we are  able to  obtain
sufficient  funding  through  equity  or debt  offerings  we will not be able to
continue  as a going  concern.  We need to raise  funds  through  equity or debt
offerings  in order to survive.  Such  financing  may not be  available on terms
favorable to us, or at all. Even if we are able obtain  additional  financing it
may not be sufficient to maintain our current operations.



<PAGE>


RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In  June  2001,  the  Financial   Accounting  Standards  Board  ("FASB")  issued
Statements of Financial  Accounting  Standards  No. 141 "Business  Combinations"
("SFAS 141") and No. 142 "Goodwill and Other  Intangible  Assets"  ("SFAS 142").
SFAS 141 requires all business combinations  initiated after June 30, 2001 to be
accounted for under the purchase method. For all business combinations for which
the date of  acquisition  is  after  June 30,  2001,  SFAS 141 also  establishes
specific  criteria for the  recognition  of intangible  assets  separately  from
goodwill  and  requires   unallocated   negative  goodwill  to  be  written  off
immediately as an extraordinary  gain, rather than deferred and amortized.  SFAS
142 changes the  accounting  for goodwill and other  intangible  assets after an
acquisition.

The most  significant  changes made by SFAS 142 are: 1) goodwill and  intangible
assets  with  indefinite  lives will no longer be  amortized;  2)  goodwill  and
intangible  assets with indefinite  lives must be tested for impairment at least
annually; and 3) the amortization period for intangible assets with finite lives
will no longer be limited to forty years. We do not believe that the adoption of
these statements will have a material effect on our financial position,  results
of operations, or cash flows.

In June 2001,  the FASB also  approved for issuance  SFAS 143 "Asset  Retirement
Obligations."  SFAS  143  establishes  accounting  requirements  for  retirement
obligations associated with tangible long-lived assets, including (1) the timing
of the liability  recognition,  (2) initial  measurement of the  liability,  (3)
allocation of asset  retirement cost to expense,  (4) subsequent  measurement of
the liability and (5) financial statement disclosures. SFAS 143 requires that an
asset  retirement  cost should be capitalized as part of the cost of the related
long-lived  asset and  subsequently  allocated to expense using a systematic and
rational method. We will adopt the statement  effective no later than January 1,
2003, as required. The transition adjustment resulting from the adoption of SFAS
143 will be reported as a cumulative effect of a change in accounting principle.
We do not  believe  that the  adoption  of this  statement  will have a material
effect on our financial position, results of operations, or cash flows.

In August 2001,  the FASB also approved SFAS 144,  Accounting for the Impairment
or Disposal of Long-Lived Assets. SFAS 144 replaces SFAS 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of. The
new accounting model for long-lived  assets to be disposed of by sale applies to
all  long-lived  assets,  including  discontinued  operations,  and replaces the
provisions of APB Opinion No. 30, Reporting Results of Operations-Reporting  the
Effects of Disposal of a Segment of a Business,  for the disposal of segments of
a business.  Statement 144 requires that those long-lived  assets be measured at
the lower of carrying amount or fair value less cost to sell,  whether  reported
in continuing operations or in discontinued operations.  Therefore, discontinued
operations will no longer be measured at net realizable value or include amounts
for operating losses that have not yet occurred. Statement 144 also broadens the
reporting of discontinued operations to include all components of an entity with
operations that can be  distinguished  from the rest of the entity and that will
be  eliminated  from  the  ongoing  operations  of  the  entity  in  a  disposal
transaction.  The  provisions  of  Statement  144 are  effective  for  financial
statements  issued for fiscal  years  beginning  after  December  15,  2001 and,
generally, are to be applied prospectively.  We do not believe that the adoption
of this statement will have a material effect on our financial position, results
of operations, or cash flows.

In April 2002, the FASB approved SFAS 145,  Rescission of FASB statements No. 4,
44 and 64, Amendment of SFAS 13, and technical  corrections.  While the adoption
of this SFAS will not have any effect on the  statements of financial  position,
stockholder  deficit,  or on the net income (loss),  the adoption may change the
classification of any future gains from debt  extinguishments  on the statements
of operations.




<PAGE>


ITEM 7. FINANCIAL STATEMENTS

See the index to our financial statements attached hereto.

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

On May 10, 2002,  Paradise  terminated  Rothstein,  Kass & Company,  P.C. as its
principal  accountant.  Paradise  appointed  Hein + Associates  as its principal
accountant.  This change in the principal  accountants was approved by the Board
of Directors of Paradise on May 13, 2002.

We are not, nor have we ever been involved in any dispute or disagreement  about
any  matter  of  accounting   principles  or  practices,   financial   statement
disclosure,  audit scope or procedures, or any reportable events with Rothstein,
Kass & Company, P.C.

Effective as of October 3, 2003, the Board of Directors  approved the engagement
of James E. Scheifley & Associates, P.C. to act as its certifying accountant.

James E. Scheifley & Associates,  P.C.'s report on the financial  statements for
December 31, 2003,  contained no adverse  opinion or disclaimer of opinion,  nor
was modified as to  uncertainty,  audit scope, or accounting  principles,  other
than it's "going concern" disclaimer.

On May 18, 2004, Hein & Associates LLP formally notified the Company that it had
resigned as the Company's certifying accountant.  The Company had engaged Hein &
Associates  LLP to audit its  financial  statements  for the  fiscal  year ended
December 31, 2001.  However,  this audit was never  completed due to the lack of
capital  required to complete  the  process.  During the two most recent  fiscal
years, and subsequent  interim periods,  there were no disagreements with Hein &
associates  on any  matter of  accounting  principles  or  practices,  financial
statement disclosure,  or auditing scope or procedure,  which disagreements,  if
not resolved to the  satisfaction  of Hein & Associates  would have caused it to
make reference to such disagreement in its reports.


ITEM 8A. CONTROLS AND PROCEDURES.

(a) Disclosure controls and procedures. Based upon an evaluation,  supervised by
Kelly Hickel, our Chief Executive Officer and Principal  Accounting  Officer, of
the  effectiveness  of the design and operation of our  disclosure  controls and
procedures,  we have concluded that our disclosure  controls and procedures were
effective as of December 31, 2003.

(b) Internal  controls.  During the year ended December 31, 2003,  there were no
significant changes in our internal accounting controls or in other factors that
materially affected our internal controls over financial reporting.



<PAGE>
                                    PART III

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

Our directors,  executive officers and key executives of our operating groups at
the time of filing are as follows:

--------------------------------------------------------------------------------
           NAME              AGE    POSITION WITH COMPANY       HELD SINCE
--------------------------------------------------------------------------------
Kelly Hickel                 62     Chairman                 February  2001
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Richard P. Rifenburgh        72     Vice-Chairman            July  2001
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Winston "Buzz" Willis        58     Director                 November  2002
--------------------------------------------------------------------------------

KELLY T. HICKEL was  appointed as our Chairman in February  2001.  From May 1999
until we merged  with  iball  Media,  Inc.  in July  2001,  he has served as the
Chairman and Chief  Executive  Officer of iball Media,  Inc. Mr. Hickel was also
the turn-around President to Miniscribe Corp., a troubled Fortune 500 disk drive
manufacturer,  from 1989 to 1990.  Mr.  Hickel has been  building  products  and
services  based on the Internet  since 1981. He was the President of the Maxwell
Technology  Information  Systems Group from 1993 until 1997.  Mr. Hickel was the
Chairman  of ELS, a  telecommunications  company,  from May 1997 until May 1999,
when he was the Chairman of Interstate Services, a real estate services company.
Mr. Hickel is a graduate of Indiana University, with a Bachelors of Science.

RICHARD P.  RIFENBURGH  has served as our Vice Chairman  since July 2001. He has
served as  Chairman  of the Board of Moval  Management  Corporation  since 1968.
Moval Management Corporation is a management consulting firm that specializes in
restoring companies in financial distress. From February 1989 until May 1991 Mr.
Rifenburgh  served as  Chairman  of the Board and  Chief  Executive  Officer  of
Miniscribe  Corporation,  a publicly-held  holding  company and  manufacturer of
computer  disc drives.  From 1987 to 1990 he was a General  Partner at Hambrecht
and Quist Venture Partners, a venture capital organization. From 1988 to 1990 he
was Chairman of the Board and Chief Executive Officer of Ironstone Group,  Inc.,
and a  publicly-held  company.  From  1996 to 2002 he  served  on the  Board  of
Directors of Tristar Corporation,  a publicly-held manufacturer of cosmetics and
fragrances that filed for bankruptcy in 2001.  From 1992 to 2001 Mr.  Rifenburgh
served as a director of  Concurrent  Computer  Corporation,  which is a publicly
reporting company.  Mr. Rifenburgh is also Chairman of the Board of Directors of
St. George Crystal Ltd., a major manufacturer of fine quality crystal products.

WINSTON "BUZZ" WILLIS, who serves as CEO of All Access Entertainment  Management
Group, Inc., a division of Paradise Music & Entertainment, Inc., is acknowledged
as a  true  pioneer  and  marketing  innovator  in  the  music  industry.  After
graduating from Case Weston  University in Cleveland,  OH, Buzz's music industry
career enjoyed  significant growth from its humble beginning as a local promoter
for MGM  Records.  From  there,  he joined the staff of RCA  Records  and signed
several  artists who went on to record gold and platinum  records.  He holds the
distinction  of being the youngest Vice  President at RCA and was the founder of
the Black Music Division of RCA Records where,  under his guidance,  the careers
of Jose Feliciano and the Main Ingredient were nurtured.  From the late 1970s to
the early  1980s,  he served as Senior V.P. of American  operations  of Phillips
Electronics Corp. (parent of Polydor/Polygram  Records).  At Phillips,  Buzz was
instrumental  in the  acquisition  of  the  Mercury  and  Verve  labels.  A true
trailblazer,  Buzz  accepted  the  position  of  CEO of CTI  Records.  Here,  he
propelled the career of jazz greats such as George  Benson and Esther  Phillips,
and was personally  responsible  for the  industry's  first platinum jazz album,
"Mr.  Magic" by Grover  Washington,  Jr. He introduced  the concept of marketing
Black artists,  such as Kool & The Gang,  Sister Sledge and Alexander O'Neal, to
mainstream audiences and treating them similarly to White artists. In 1996, Buzz
launched One World  Entertainment in partnership with The Sanctuary Group, which
provided services such as artist management,  tour direction,  record production
and concert tour promotion. Buzz is a member of the R&B Hall of Fame.

COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

Section 16(a) of the Securities  Exchange Act of 1934, as amended (the "Exchange
Act")  requires our officers and  directors  and holders of more than 10% of our
common  stock  (collectively  "Reporting  Person")  to file  reports  of


<PAGE>

initial  ownership,  ownership and changes in ownership of the common stock with
the  Securities  and  Exchange  Commission  within  certain  time periods and to
furnish us with copies of all such  reports.  We are in the process of reviewing
the record  ownership  of certain  Reporting  Persons and believe  that  certain
Reporting  Persons will be required to file reports once we have  finished  this
process.

AUDIT COMMITTEE FINANCIAL EXPERT

The  Securities  Exchange  Commission  has adopted  rules to  implement  certain
requirements  of the  Sarbanes-Oxley  Act of 2002  pertaining to public  company
audit  committees.  One of the rules  adopted  by the SEC  requires a company to
disclose  whether it has an "audit  committee  financial  expert" serving on its
audit  committee.  Our  board  of  directors  has not yet  established  an audit
committee. As such, our board has not yet appointed an audit committee financial
expert.  At this time, our board of directors  believes it would be desirable to
have an audit committee,  and for the audit committee to have an audit committee
financial  expert serving on the  committee.  At this time, we do not believe we
have  adequate  funding to require such a committee,  and  therefore,  no formal
search process has commenced.

CODE OF ETHICS

We have not yet adopted a Code of Ethics,  but are  consulting  with counsel and
beginning the process of adopting a code of ethics.

ITEM 10. EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The following table sets forth all compensation awarded to, earned by or paid by
Paradise or its subsidiaries during each of the last three fiscal years to Kelly
Hickel, our current Chairman.

<TABLE>
<CAPTION>

                           ANNUAL COMPENSATION                LONG TERM COMPENSATION AWARDS
                          ---------------------              ------------------------------
NAME/PRINCIPAL POSITION  YEAR      SALARY ($)   BONUS ($)       RESTRICTED     SECURITIES      ALL OTHER
                                                                STOCK AWARDS   UNDERLYING      COMPENSATION
                                                                               OPTIONS
<S>                      <C>       <C>          <C>             <C>            <C>             <C>
Kelly Hickel (1)         2001      $90,579      ---             ---            ---             ---
Chairman since           2002      ---          ---             ---            ---             $53,915
February 2001            2003      ---          ---             ---            ---             $45,095
</TABLE>

(1) In April,  2002,  the Board of Directors  approved the issuance of up to ten
million  shares  of  the  Company's  common  stock  to  Kelly  Hickel,   or  his
designee(s),  as payment of compensation  due at a price equal to the average of
the market  value for the  thirty  days prior to the time the stock is issued as
payment.

DIRECTORS' COMPENSATION

Pursuant to our  Outside  Directors  Program,  directors  who are not  employees
("Outside  Directors") are entitled to receive non-qualified options to purchase
5,000  shares  for each year of  service,  payable  in advance on July 1 of each
year, at an exercise price equal to the closing bid price of the common stock on
the first  trading day of each fiscal  year.  No grants have been made under the
Outside Directors Program since July 1, 2000.

Outside Directors are entitled to receive  compensation in the amount of $18,000
per annum, 100% payable in stock. Such amounts are payable quarterly in arrears.
For the  fiscal  period  ended  December  31,  2003,  persons  who were  Outside
Directors during such fiscal year did not receive any shares of common stock.

All directors are reimbursed for certain  expenses in connection with attendance
at Board of  Directors  and  Committee  meetings.  Other  than with  respect  to
reimbursement  of expenses,  directors  who are employees or officers or who are
associated with us do not receive  compensation for service as directors.  We do
not have any employment agreements with any of the Named Executive Officers.

<PAGE>


ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information as of June 28, 2004 regarding
the share  ownership  of the company by (i) each person who is known to us to be
the  record or  beneficial  owner of more than five  percent  (5%) of our common
stock;  (ii) each  director  and each  named  executive  officer;  and (iii) all
directors and executive officers as a group.

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------
        NAME AND ADDRESS OF BENEFICIAL OWNER (1)          AMOUNT AND NATURE OF BENEFICIAL     % OF OUTSTANDING SHARES
                                                                   OWNERSHIP (2)                      OWNED (3)
------------------------------------------------------------------------------------------------------------------------
<S>                                                                 <C>                                 <C>
NAMED EXECUTIVE OFFICER AND DIRECTORS:
------------------------------------------------------------------------------------------------------------------------
Kelly Hickel                                                        3,039,702(4)                        5.2%
------------------------------------------------------------------------------------------------------------------------
Richard Rifenburgh                                                  1,370,062(5)                        2.3%
------------------------------------------------------------------------------------------------------------------------
Julia M. Belden                                                     4,500,000(6)                        7.7%
------------------------------------------------------------------------------------------------------------------------
Winston Willis                                                      3,250,000                           5.5%
------------------------------------------------------------------------------------------------------------------------
ALL NAMED EXECUTIVE OFFICERS AND DIRECTORS AS A GROUP              12,159,764                          20.7%
(4 PERSONS)
------------------------------------------------------------------------------------------------------------------------
BENEFICIAL OWNERS IN EXCESS OF 5% (OTHER THAN NAMED
EXECUTIVE OFFICERS AND DIRECTORS):
------------------------------------------------------------------------------------------------------------------------
Porter Capital Corporation                                         7,125,000 (7)                       12.2%
------------------------------------------------------------------------------------------------------------------------
Hickel Living Trust                                                9,374,869 (8)                       16.0%
------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) The address of each  beneficial  owner  identified  is c/o Paradise  Music &
Entertainment,  Inc.,  122 East 42nd  Street,  New York,  NY 10168,  except  for
(i)Porter Capital Corporation,  which is 2112 First Avenue North, Birmingham, AL
10168.

(2) Unless otherwise  indicated,  we believe that all persons named in the table
have sole voting and investment power with respect to all shares of common stock
beneficially  owned by them.  A person is deemed to be the  beneficial  owner of
securities  that can be acquired by such person  within 60 days of June 28, 2004
upon the exercise of options, warrants or convertible securities.

(3) Each beneficial owner's  percentage  ownership is determined by assuming (i)
that options,  warrants or convertible  securities  that are held by such person
(but not those held by any other person) and that are exercisable within 60 days
of June 28, 2004 have been exercised and converted,  and (ii) 58,496,358  shares
of common  stock were  outstanding,  before any  consideration  is given to such
options, warrants or convertible securities.

(4) Includes  1,450,000  shares  issued in 2004.  These shares were approved for
issuance on April 9, 2002.

(5) Includes  1,000,000  shares  issued in 2004.  These shares were approved for
issuance on October 4, 2003.

(6) Includes  1,000,000  shares  issued in 2004.  These shares were approved for
issuance on October 4, 2003.

(7) Includes securities held by Porter Capital Corporation (PCC) as follows: (i)
common  stock,  (ii)  warrants to purchase  275,000  shares of common stock at a
price of $.05 per share,  (iii)  warrants to purchase  500,000  shares of common
stock at a price of $.02 per share, and (iv) warrants to purchase 500,000 shares
of common  stock at a price of $0.002  per  share.  This  amount  also  includes
4,000,000  shares  which PCC had the right to acquire in 2002 but which were not
issued until 2004.

(8) Includes  7,700,000  shares  issued in 2004.  These shares were approved for
issuance on April 9, 2002.

Information  contained  herein with regard to stock  ownership was obtained from
our stockholders' list, filings with governmental authorities, or from the named
individual  nominees,  directors  and  officers.  The persons  identified in the
foregoing table disclaim  beneficial  ownership of shares owned or held in trust
for the benefit of members of their  families or entities with which they may be
associated.




<PAGE>



PART IV

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

(a)   Exhibits

Exhibit
Number                            Description
--------------------------------------------------------------------------------

3.1     Certificate of Incorporation of the Registrant (1)
3.2     Amended and Restated By-Laws of the Registrant (1)
4.1     Specimen of Registrant's Common Stock Certificate (1)
4.2     Specimen of Registrant's Warrant Certificate (1)
4.3     Form of Representative's Warrant Agreement including form of Warrant (1)
4.4     Form of Warrant Agreement between Registrant and Continental Stock
        Transfer and Trust Company (1)
10.7    Form of The Registrant's 1996 Stock Option Plan (corrected version) (1)
21.1    Subsidiaries of Registrant (2)
31      Certification of Kelly Hickel under Rule 13a-14(a)
32      Certification of Kelly Hickel


        (1) Incorporated by reference to the Company's  Registration  Statement
        on Form SB-2 (Reg. No.  333-13941) which was declared  effective by the
        Securities and Exchange  Commission on January 22, 1997. nge Commission
        on March 29, 2000.

        (2)  Incorporated by reference to the Company's  Current Report on Form
        8-K filed on February 15, 2001.


(b) Reports on Form 8-K

                                      None.

<PAGE>



                                   SIGNATURES

In accordance with the  requirements of the Securities  Exchange Act of 1934, as
amended,  the  registrant  caused  this report to be signed on its behalf by the
undersigned  thereunto duly  authorized,  in the City of New York,  State of New
York on August 9, 2004.

                                           PARADISE MUSIC & ENTERTAINMENT, INC.


                                            By:     /s/ Kelly T. Hickel
                                                    ----------------------
                                                    Kelly T. Hickel, Chairman

In accordance  with the Exchange Act of 1934,  as amended,  this report has been
signed below by the  following  persons on behalf of the  registrant  and in the
capacities and on the dates below.

        Signature                Title                            Date

/s/ Kelly T. Hickel              Chairman of the Board            August 9, 2004
-------------------
Kelly T. Hickel


/s/ Richard P. Rifenburgh        Vice Chairman                    August 9, 2004
-------------------------
Richard P. Rifenburgh


/s/ Winston Willis               Director                         August 9, 2004
------------------
Winston Willis




<PAGE>


                        CONSOLIDATED FINANCIAL STATEMENTS


                                    CONTENTS


INDEPENDENT AUDITOR'S REPORT                                          F-2

CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEET                                            F-3

CONSOLIDATED STATEMENTS OF OPERATIONS                                 F-4

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY                       F-5

CONSOLIDATED STATEMENTS OF CASH FLOWS                                 F-6

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                            F-7 - F-14



<PAGE>


                     REPORT OF INDEPENDENT PUBLIC ACCOUNTANT


Board of Directors and Stockholders
Paradise Music and Entertainment, Inc.


We have audited the balance sheet of Paradise Music and  Entertainment,  Inc. as
of December 31,  2003,  and the related  statements  of  operations,  changes in
stockholders'  equity,  and cash  flows  for  each of the  years in the two year
period then ended.  These  financial  statements are the  responsibility  of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
financial statements based on our audits.

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

In our opinion,  the financial  statements referred to above, present fairly, in
all  material   respects,   the  financial   position  of  Paradise   Music  and
Entertainment,  Inc. as of December 31, 2003,  and the results of its operations
and cash  flows  for each of the years in the two year  period  then  ended,  in
conformity with generally accepted accounting principles.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in Note 11 to the
financial statements,  the Company has suffered recurring losses from operations
and has substantial deficits of stockholders' equity and working capital,  which
raise  substantial  doubts  about its ability to  continue  as a going  concern.
Management's plans in regard to these matters are also described in Note 11. The
financial  statements do not include any adjustments  that might result from the
outcome of this uncertainty.


                                           James E. Scheifley & Associates, P.C.
                                           Certified Public Accountants

Dillon, Colorado
July 30, 2004



<PAGE>




                      Paradise Music & Entertainment, Inc.
                           Consolidated Balance Sheet
                             As of December 31, 2003

                                     ASSETS

Current assets:
  Cash                                                    $               5,099
                                                         ----------------------

      Total current assets                                $               5,099
                                                         ======================



LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Notes payable - bank                                    $             300,000
  Accounts payable                                                    1,493,631
  Notes payable - iball                                                 305,250
  Bridge Loans                                                          150,000
  Mezzanine Loans                                                       100,000
  Accrued Interest                                                      165,252
  Accrued wages                                                         199,747
  Accrued taxes                                                          90,269
  Accrued Expenses - Restructure                                         72,619
 Net liabilities of discontinued operations                           4,625,114
                                                          ---------------------
      Total current liabilities                                       7,501,882


Stockholders' equity:
 Preferred stock, $.01 par value,
  5,000,000 shares authorized                                                 -
 Common stock, $.01 par value,
  75,000,000 shares authorized,
  40,096,358 shares issued and outstanding                              400,964
  Common Stock to be issued                                             200,000
 Additional paid-in capital                                          26,915,402
Accumulated (deficit)                                               (35,013,149)
                                                          ---------------------
                                                                     (7,496,783)
                                                          $               5,099


                 See accompanying notes to financial statements.




<PAGE>




                      Paradise Music & Entertainment, Inc.
                            Statements of Operations
                     Years Ended December 31, 2003 and 2002


<TABLE>
<CAPTION>

                                                                                        December 31,
                                                                              2003                        2002
                                                                             -----                        ----
<S>                                                                        <C>                     <C>
Revenue                                                                    $         --            $    162,650
Operating expenses
  Cost of sales                                                                      --                      --
  Marketing, selling, general and administrative                                  7,218               1,794,879
  Impairment of fixed assets, goodwill and other intangibles                         --                   3,455
                                                                           ------------            ------------
Total operating expenses                                                          7,218               1,798,334
                                                                           ------------            ------------
(Loss) from continuing operations                                                (7,218)             (1,635,684)

Other (income) and expense
  Interest expense                                                               89,985                 225,485
  Interest (income)                                                                  --                      --
  Other expenses                                                                     --                      --
                                                                           ------------            ------------
                                                                                 89,985                 225,485

(Loss) before income taxes, discontinued operations and
 extraordinary item                                                             (97,202)             (1,861,169)
Provision for income taxes                                                           --                     160
                                                                           ------------            ------------
(Loss) before discontinued operations and
 extraordinary item                                                             (97,202)             (1,861,329)
                                                                           ------------            ------------
Income (loss) from discontinued operations                                           --                  16,956
                                                                           ------------            ------------
(Loss) before extraordinary item                                                (97,202)             (1,844,373)
                                                                           ------------            ------------
 Net (loss)                                                                $    (97,202)           $ (1,844,373)
                                                                           ============            ============

 Basic and diluted (loss) per share
   Before discontinued operations and extraordinary item                   $    (0.0024)           $      (0.06)
  Discontinued operations                                                            --                    0.00
  Extraordinary item                                                                 --                      --
                                                                           ------------            ------------
                                                                           $    (0.0024)           $      (0.06)
                                                                           ============            ============
 Weighted average shares outstanding                                         40,096,358              30,110,161
                                                                           ============            ============
</TABLE>

                See accompanying notes to financial statements.





<PAGE>




                      Paradise Music & Entertainment, Inc.
            Consolidated Statement of Changes in Stockholders' Equity
                     Years Ended December 31, 2003 and 2002


<TABLE>
<CAPTION>

                                                                          Additional       Common
                                                 Common       Stock        Paid -in        Stock       Accumulated
                 ACTIVITY                        Shares      Amount        Capital      Subscriptions     Deficit         Total

<S>               <C>                         <C>              <C>          <C>          <C>            <C>              <C>
 Balance, January 1, 2002                     25,464,339       254,643      26,716,247            --    (33,071,570)     (6,100,680)


Issuance of stock and warrants for
acquisition                                      138,212         1,382           2,073                                        3,455


Common Stock to be issued                                                                    200,000                        200,000


Issuance of stock for debt cancellation        1,600,000        16,000          64,000                                       80,000


Issuance of stock for services                 9,043,807        90,438          90,502                                      180,940


Compensation value of warrants issued                                           65,013                                       65,013
 for services and long-term financing


Net (loss) for the year                               --            --              --            --     (1,844,373)     (1,844,373)
                                           -------------   -----------     -----------  ------------    -----------     -----------

 Balance, December 31, 2002                   36,246,358       362,463      26,937,834       200,000    (34,915,943)     (7,415,645)
                                           =============   ===========     ===========  ============    ===========     ===========



Issuance of stock for services                 3,850,000        38,500         (23,100)                                      15,400
 previously accrued


Compensation value of warrants                                                     667                                          667
 issued for financing

Net (loss) for the year                               --            --              --            --        (97,202)        (97,202)
                                           -------------   -----------     -----------  ------------    -----------     -----------
 Balance, December 31, 2003                   40,096,358       400,963      26,915,401       200,000    (35,013,145)     (7,496,781)

</TABLE>




                See accompanying notes to financial statements.





<PAGE>




                      Paradise Music & Entertainment, Inc.
                            Statements of Cash Flows
                     Years Ended December 31, 2003 and 2002


<TABLE>
<CAPTION>

                                                                                                  December 31,
                                                                                         2003                     2002
                                                                                         ----                     ----
<S>                                                                                     <C>                <C>
Net (loss)                                                                              $   (97,205)       $(1,844,373)
  Adjustments to reconcile net income (loss) to net
   cash provided by operating activities:

   Depreciation and amortization                                                                 --                 --
   Non-cash consulting expense in connection with warrants

   Provision for returns                                                                         --                 --
   Common stock issued for services                                                             667            329,408
   Stock Subscriptions                                                                                         200,000
   Rent Deposit Expensed                                                                                        10,285

   Impairments and losses arising from discontinued  operations                                                  6,829
Changes in assets and liabilities:
    (Increase) decrease in accounts receivable
    Increase (decrease) in accounts payable                                                 (87,133)           507,940
    Increase (decrease) in accrued expenses                                                  38,097            549,138
                                                                                        -----------        -----------
       Total adjustments                                                                    (48,307)         1,603,600
                                                                                        -----------        -----------
  Net cash (used in)
   operating activities                                                                    (145,574)          (240,773)
                                                                                        -----------        -----------
Cash flows from investing activities:
   Acquisition of plant and equipment                                                            --                 --
   Acquisition costs net of cash acquired
Net cash (used in) investing activities                                                          --                 --
                                                                                        -----------        -----------
Cash flows from financing activities:
   Proceeds from bank borrowings                                                             23,692            110,744
   Proceeds from loans                                                                      110,000            140,000
   Repayment of notes and line of credit                                                         --                 --
   Repayment of shareholder loans                                                                --                 --
                                                                                        -----------        -----------
  Net cash provided by
   financing activities                                                                     133,692            250,744
                                                                                        -----------        -----------
Increase (decrease) in cash                                                                 (11,882)             9,971
Cash and cash equivalents,
 beginning of period                                                                         16,981              7,010
                                                                                        -----------        -----------
Cash and cash equivalents,
 end of period                                                                          $     5,099        $    16,981
                                                                                        ===========        ===========
Supplemental cash flow information:
     Cash paid for interest
     Cash paid for income taxes

Non-cash financing activities
     Conversion of Liabilities into common stock subscriptions                                             $   200,000
     Options, warrants and stock granted for services                                  $        667        $   329,408
     Net assets acquired for stock and warrants
</TABLE>


                See accompanying notes to financial statements.




<PAGE>



                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION AND NATURE OF OPERATIONS:
   -------------------------------------

Paradise  Music &  Entertainment,  Inc.  ("Paradise")  was  formed in July 1996.
Effective July 3, 2001,  Paradise and iball Media Inc. ("iball") completed their
plan of merger and effectively combined their business interests.

Paradise Music &  Entertainment,  Inc.  ("Paradise" or the "Company") is a music
and  entertainment  company  focused on partnering with other companies to build
their brands by utilizing  music and events to marry  marketing,  technology and
entertainment to connect customers with consumers.

The Company  markets  sponsor-targeted  entertainment  projects,  including  the
development  and  production  of  proprietary  festivals,  events  and  branding
campaigns  for corporate  clients.  The Company has agreed to produce two events
for not-for-profit organizations. The Company is currently in negotiations for a
number of festivals and music events for the 2004/2005  season,  with  contracts
with a number of global brand companies currently being negotiated.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
   ------------------------------------------
Principles of Consolidation - The consolidated  financial statements include the
accounts of Paradise and its wholly-owned subsidiaries, iball Media, Events, All
Access, PDSE Records,  Push Records,  PDSE Digital,  Rave, Picture Vision, Straw
Dogs  and  Shelter  Films   (collectively   the   "Company").   All  significant
intercompany accounts and transactions have been eliminated in consolidation. In
2001, the Company discontinued operations in all the subsidiaries except for All
Access Entertainment Management Group, Inc.

Revenue  Recognition  - The  Company's  current  revenue  comes  from short term
festival and event  marketing.  These are typically  short term projects and the
revenues are recognized when the project is completed.

Cash and Cash Equivalents -The Company  considers all highly liquid  investments
with  maturities of three months or less when purchased to be cash  equivalents.
The Company  maintains its cash in bank deposit  accounts  that,  at times,  may
exceed federally insured limits. The Company has not incurred any losses in such
accounts and believes it is not exposed to any significant credit risk on cash.

Inventory  -  Inventory  is stated at the lower of cost or market  and  consists
primarily of finished compact discs and tape cassettes. The cost of inventory is
determined by the first-in,  first-out  (FIFO) method.  Due to the change in the
business  strategy to focus on festivals and events,  and the Company's  limited
personnel  to pursue the sale of the  Company's  inventory,  the  inventory  was
impaired to zero at December 31, 2001. Any future sale of compact discs or tapes
will be recorded as revenue if and when it occurs.

Impairment  of Long  Lived  Assets -  Impairment  losses  on  long-lived  assets
(including  goodwill) is recognized when events and circumstances  indicate that
the  undiscounted  cash flows estimated to be generated by these assets are less
than the carrying amounts of those assets.

Stock Warrants - Stock warrants  issued for goods and services are accounted for
in accordance  with  Emerging  Issues Task Force (EITF)  96-18,  Accounting  for
Warrants  that are  Issued  to  other  than  Employees  for  Acquisition,  or in
Conjunction  with Selling Goods and Services.  Accordingly  warrants  subject to
vesting based on performance, will be valued each reporting period until vested.
The portion of the value related to the completed term of the related  agreement
is expensed, and the remaining non-cash deferred consulting expense is amortized
over the remaining term of the agreement. The value of such related warrants was
subject to adjustment until such time that the warrant was nonforfeitable, fully
vested  and  exercisable.  All  warrants  issued as  consideration  for goods or
services, either were fully vested or cancelled as of December 31, 2003.

Income  Taxes - Deferred  income tax assets and  liabilities  are  computed  for
differences  between  the  financial  statement  and tax  bases  of  assets  and
liabilities  that will  result in taxable or  deductible  amounts in the future,
based on  enacted  tax laws and rates  applicable  to the  periods  in which the
differences  are expected to affect  taxable


<PAGE>

income.  Valuation  allowances are  established,  when necessary,  to reduce the
deferred income tax assets to the amount expected to be realized.

Loss Per  Common  Share - Basic  earnings  per share  excludes  dilution  and is
computed by dividing  loss  applicable  to common  stockholders  by the weighted
average number of common shares outstanding for the period. Diluted earnings per
share  reflects the  potential  dilution that could occur if securities or other
contracts to issue common stock were exercised or converted into common stock or
resulted in the issuance of common stock that then shared in the earnings of the
entity. Diluted loss per common share is the same as basic loss per common share
for all periods  presented.  Unexercised  stock options and warrants to purchase
2,656,070 shares at December 31, 2003 and 4,354,012 shares at December 31, 2002,
of the Company's  common stock were not included in the  computations of diluted
earnings per common share because their effect would have been antidilutive as a
result of the Company's losses.

Fair Value of Financial Instruments - The fair value of the Company's assets and
liabilities   which  qualify  as  financial   instruments  under  SFAS  No.  107
"Disclosures  about  fair  value  of  financial  instruments,"  approximate  the
carrying amounts presented in the consolidated balance sheet.

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

The Company's calculation of impairments,  discontinued operations,  litigation,
lease liabilities and  contingencies,  and other liabilities and obligations are
significant  estimates.  It is at least reasonably possible that these estimates
could be revised in the near term and that such a revision could be material.

New  accounting  pronouncements  -  In  May  2003,  the  FASB  issued  Financial
Accounting Standard No. 150, "Accounting for Certain Financial  Instruments with
Characteristics of Both Liabilities and Equity" (SFAS 150). SFAS 150 establishes
standards  for  how  a  company   classifies  and  measures  certain   financial
instruments with  characteristics  of both  liabilities and equity.  It requires
that a company  classify a  financial  instrument  that is within the scope as a
liability  (or an  asset  in some  circumstances).  SFAS  150 is  effective  for
financial instruments entered into or modified after May 31, 2003, and otherwise
is effective at the beginning of the first interim period  beginning  after June
15, 2003. The Company does not expect the adoption of SFAS 150 to have an impact
on its financial position or operating results.

In April 2003, the FASB issued  Statement of Financial  Accounting  Standard No.
149,  "Amendment  of  Statement  133  on  Derivative   Instruments  and  Hedging
Activities" (SFAS 149). SFAS 149 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 FASB  Statement No. 133,  "Accounting  for Derivative
Instruments  and  Hedging  Activities".  SFAS  149 is  generally  effective  for
contracts entered into or modified after June 30, 2003 or hedging  relationships
designated after June 30, 2003. The Company does not expect the adoption of SFAS
149 to have an impact on its financial position or operating results.

In  January  2003,  the  FASB  issued  FASB   Interpretation   ("FIN")  No.  46,
Consolidation of Variable  Interest  Entities,  which requires variable interest
entities  (commonly  referred  to as SPEs)  to be  consolidated  by the  primary
beneficiary  of the entity if certain  criteria are met. FIN No. 46 is effective
immediately  for all new variable  interest  entities  created or acquired after
January 31, 2003.  The adoption of this  statement does not impact the Company's
historical or present  financial  statements,  as the Company has not created or
acquired any variable interest entities, nor does it expect to in the future.

In December 2002, the Financial  Accounting Standards Board ("FASB") issued SFAS
148  "Accounting  for Stock-Based  Compensation--Transition  and  Disclosure--an
amendment of SFAS 123." SFAS 148 provides  alternative methods of transition for
a voluntary  change to the fair value based method of accounting for stock-based
employee  compensation  from the  intrinsic  value-based  method  of  accounting
prescribed  by APB 25. As  allowed  by SFAS 123,  the  Company  has  elected  to
continue  to apply  the  intrinsic  value-based  method of  accounting,  and has
adopted


<PAGE>

the  disclosure  requirements  of SFAS  123.  The  Company  currently  does  not
anticipate adopting the provisions of SFAS 148.

In July 2002, the FASB issued SFAS 146,  "Accounting  for Costs  Associated with
Exit or Disposal  Activities." SFAS 146 provides new guidance on the recognition
of costs  associated  with exit or disposal  activities.  The standard  requires
companies to recognize costs  associated  with exit or disposal  activities when
they are incurred  rather than at the date of  commitment to an exit or disposal
plan.  SFAS 146 supercedes  previous  accounting  guidance  provided by the 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)."  EITF Issue No. 94-3 required  recognition of costs at the date
of  commitment  to an  exit  or  disposal  plan.  SFAS  146  is  to  be  applied
prospectively to exit or disposal activities  initiated after December 31, 2002.
Early  application is permitted.  The adoption of SFAS 146 by the Company is not
expected to have a material impact on the Company's financial position,  results
of operations, or cash flows.

In April 2002, the FASB issued SFAS 145,  "Rescission of FASB  Statements No. 4,
44, and 64,  Amendment of FASB  Statement  No. 13, and  Technical  Corrections."
Among other things,  this statement  rescinds FASB  Statement No. 4,  "Reporting
Gains and Losses  from  Extinguishment  of Debt"  which  required  all gains and
losses from extinguishment of debt to be aggregated and, if material, classified
as an  extraordinary  item, net of related income tax effect.  As a result,  the
criteria  in APB  Opinion  No.  30,  "Reporting  the  Results of  Operations  --
Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary,
Unusual and Infrequently Occurring Events and Transactions," will now be used to
classify  those  gains and  losses.  The  provisions  of SFAS 145 related to the
classification  of debt  extinguishment  are effective for years beginning after
May 15, 2002.  The adoption of SFAS 145 by the Company is not expected to have a
material impact on the Company's financial position,  results of operations,  or
cash flows.

3. CONTINUED OPERATIONS:
   --------------------
For the years ended  December 31, 2003,  and December 31, 2002,  the Company had
net losses of $97,202 and $1,844,000, respectively. The Company's strategy is to
focus on festivals and events in a global branding strategy, and while there has
been some progress made on the  implementation  of this relatively new strategy,
the  strategy is still in its infancy  and the  Company  has  generated  limited
revenues from it. The Company  presently has limited credit facilities and is in
default on several  loan  instruments,  however as  discussed  in Note 12,  some
additional  financing has been obtained  subsequent to year-end 2003. All of the
above factors raise  substantial  doubt about our ability to continue as a going
concern.

4. DEBT:
   ----
Financing  Agreement - On April 25, 2001, the Company  entered into a commercial
financing  agreement  with  Porter  Capital  Corporation  (PCC).  The  agreement
provides that the Company sell,  transfer,  set over and assign certain invoices
and  accounts  receivable  to the lender,  with  recourse.  The credit  facility
provides for maximum  revolving  borrowings up to $1,500,000.  Borrowings  under
this  facility  are based on a funding  formula and, in addition to the accounts
receivable  and invoices are  collateralized  by all of the Company's  remaining
assets.  As of December  31, 2003  approximately  $300,000  was the  outstanding
advance  balance.  Advances from the lender bear interest at the higher of 10.5%
per annum or the prime rate plus 2.50%.

In January  2002 through May 2002 the lender  advanced  $110,000 on a short term
basis and in May 2002  converted  $200,000  of the debt to equity by agreeing to
purchase  4,000,000  shares at a price of $0.05 per share.  The  Company  issued
1,600,000  shares to the  lender on March 13,  2002 as  consideration  for these
borrowings and conversions. The lender signed an extension agreement on December
31, 2002.

As of October 10, 2003,  PCC's Senior Loan  balance due was  $607,351.45  due to
accrued  interest,  finance charges and minimum monthly fees. On April 12, 2004,
PCC  agreed to reduce  the  Principal  Amount  due  under the  Senior  Line from
$607,351.45  to  $300,000.  Further,  the Senior Loan balance will now be due on
April 15. 2005 and will not bear  interest  until after its  maturity  date,  at
which time the  interest  will be payable  monthly at the rate of 18% per annum.
The loan  balance will be paid down out of the proceeds of the sale of the stock
held by PCC.

<PAGE>

See Note 12 for terms of  additional  borrowings  from the lender  subsequent to
December 31, 2003.

On December 1, 2003,  one private  investor who had loaned the Company  money in
April,  2002, loaned an additional  $14,500 to the Company.  The warrants on the
April 2002 loan were  increased to 500,000 shares and the exercise price reduced
to $0.002 per share.

Notes Payable - Notes payable totaling $305,205 are past due and in default. The
notes currently bear a default interest rate of 15%.

5. ACCOUNTS PAYABLE AND ACCRUED EXPENSES:
   -------------------------------------
At December  31, 2003,  accounts  payable and accrued  expenses  for  continuing
operations consist of the following:

        Accounts Payable                            $  1,493,631
        Accrued Interest (other than PCC)                165,252
        Accrued Wages and Taxes                          290,016
        Accrued Expenses - restructure                    72,619
                                                    ------------
                                                    $  2,021,518

Regarding the Accrued  Expenses for  Restructure,  the Company  anticipated  the
totals costs  through  Fiscal Year 2003  required to complete the  financial and
operational  restructuring  necessary  to  move  from  its  past  focus  on  the
Consolidated Entertainment Company to its future focus as a provider of narrowly
focused  marketing  and  entertainment   musical  events.  These  expenses  were
reflected  in Fiscal  Year  2002.  The  Company  believes  that  these  accruals
represent  the total costs  necessary to accomplish  that  objective in a manner
consistent with Generally Accepted Accounting Principles (GAAP).

6. INCOME TAXES:
   ------------
The Company  accounts for income taxes under SFAS 109, which requires the use of
the liability method. SFAS 109 provides that deferred tax assets and liabilities
are  recorded  based on the  differences  between  the tax bases of  assets  and
liabilities  and  their  carrying  amounts  for  financial  reporting  purposes,
referred to as temporary differences. Deferred tax assets and liabilities at the
end of each period are determined using the currently  enacted tax rates applied
to  taxable  income  in the  periods  in  which  the  deferred  tax  assets  and
liabilities are expected to be settled or realized.

The provision for income taxes differs from the amount  computed by applying the
statutory  federal income tax rate to income before  provision for income taxes.
The sources and tax effects of the differences are as follows:

     Income tax provision at the federal statutory rate             34%
     Effect of operating losses                                    (34%)
                                                                   ----
                                                                    --
                                                                   ====

As of December 31, 2003,  the Company has a net operating loss  carryforward  of
approximately $21,100,000.  This loss will be available to offset future taxable
income.  If not used, this  carryforward  will expire through 2023. The deferred
tax  asset  of   approximately   $7,175,000   relating  to  the  operating  loss
carryforward has been fully reserved at December 31, 2003. The reserve increased
by approximately $35,000 during fiscal year ending December 31, 2003.


<PAGE>

7. COMMITMENTS AND CONTINGENCIES:
   -----------------------------
We have been a party to several legal proceedings:

     o    The dispute with Craig Rodgers, former president of a subsidiary,  was
          settled on April 15, 2003.  The terms of the  settlement  are that the
          Company would make two payments of $12,500 to Mr.  Rodgers,  the first
          such  payment to be made on or before  June 10,  2003,  and the second
          payment to be made on or before August 10, 2003.  While these payments
          have not yet been made,  they were provided for in the liabilities for
          discontinued  operations  section on the balance sheet for fiscal year
          2001.

     o    Cast & Crew Entertainment Services, Inc. brought a claim against us in
          Superior  Court,  County of Los  Angeles,  for unpaid  invoices in the
          amount of  approximately  $805,000.  Though  neither side admitted any
          wrongdoing,  this dispute was settled on November 13, 2002.  The terms
          of the  settlement  are for the  Company to pay the sum of $250,000 by
          December 31, 2003. In addition,  the Company  agreed to issue warrants
          to the  Plaintiff to purchase  three  million  shares of the Company's
          common stock at $0.15 per share.  These liabilities have been provided
          for on the balance  sheet for fiscal year 2002.  This  Agreement is in
          default.

     o    Several vendors obtained  judgments against us from New York Courts in
          the aggregate amount of  approximately  $60,000 for unpaid fees. These
          charges have been  provided for in the  liabilities  for  discontinued
          operations  section on the balance  sheet.  The Company has no further
          information regarding these proceedings.

     o    On August 13,  2001,  8330 West Third  Street,  LLC filed a  complaint
          against Straw dogs, Inc, a subsidiary of the Company,  in the Superior
          Court of California,  County of Los Angeles,  alleging that Straw Dogs
          breached various obligations under its lease dated August 1, 1998. The
          suit seeks damages, including but not limited to past due rent, in the
          amount of  approximately  $59,000,  attorneys  fees, and certain other
          fees  and  taxes.   These  charges  have  been  provided  for  in  the
          liabilities for discontinued  operations  section on the balance sheet
          for  fiscal  year  2001.  No  further  action  has  been  taken by the
          plaintiff.

Settlement of any  outstanding  claim may be predicated on our ability to secure
capital  funding.  Unfavorable  resolution  of these  claims is likely to have a
material  adverse  impact on our financial  condition.  If a judgment is entered
against us with respect to one or more of these claims,  it may be unlikely that
we will be able to pay such judgment.

The Company has agreed to pay each of its  outside  directors  $18,000 per year,
payable  quarterly in the  Company's  common stock valued on the last day of the
applicable  quarter.  The  Company  has also  agreed  to pay the  Vice  Chairman
$166,500 per year. The Company has agreed to pay the Chairman $250,000 per year.
The Company has not been able to make these payments.



<PAGE>



8. STOCKHOLDERS' EQUITY:
   --------------------
During 2003,  3,850,000  shares of common stock were issued to  consultants  for
services  rendered in 2002.  The expense for these  shares was valued at $15,400
and was accrued in operations  for fiscal year 2002.  Subsequent to December 31,
2003, and through June 28, 2004,  10,650,000  shares of common stock were issued
to  consultants  for  services  that  had  been  accrued  in 2002 as part of the
Company's  restructuring  plan. An additional  3,750,000  shares of common stock
were issued during this period to  consultants  for services  performed in 2004.
These additional  shares were valued at approximately  $50,000,  and this amount
has been recorded in operations for fiscal year 2004. In 2004,  4,000,000 shares
of common  stock were issued to Porter  Capital  Corporation.  These shares were
authorized and the expense was accounted for in fiscal year 2002.

9. STOCK OPTIONS:
   -------------
On October 8, 1996, the Board of Directors adopted and the stockholders approved
the Option Plan.  The Option Plan  provides for the granting of incentive  stock
options  ("ISOs") within the meaning of Section 422 of the Internal Revenue Code
of 1986, as amended (the "Code"),  non-qualified  stock options ("NQSOs") and/or
Stock Appreciation Rights (SARs) to certain directors,  agents and employees of,
and consultants to the Company. The purpose of the Option Plan is to attract and
retain exemplary employees,  agents, consultants and directors. Options and SARs
granted under the Option Plan may not be  exercisable  for terms in excess of 10
years  from the date of grant.  In  addition,  no options or SARs may be granted
under the  Option  Plan later than 10 years  after the Option  Plan's  effective
date.  The total number of shares of Common Stock with respect to which  options
and SARs will be granted under the Option Plan is 3,000,000.  The shares subject
to and  available  under the Option Plan may  consist,  in whole or in part,  of
authorized  but  unissued  stock or treasury  stock not  reserved  for any other
purpose.  Any  shares  subject to an option or SAR that  terminates,  expires or
lapses  for any  reason,  and any  shares  purchased  pursuant  to an option and
subsequently  repurchased  by the  Company  pursuant to the terms of the option,
shall again be available  for grant under the Option Plan. As part of the Option
Plan,  the Board of  Directors  set aside for Outside  Directors an aggregate of
100,000  stock  options to eligible  directors  of the  Company.  Each  eligible
director receives 5,000 stock options per annum, subject to adjustment,  for his
services on the Board on each July 1. The options  are  exercisable  at the fair
market value of the common stock on the last date  preceding  the date of grant.
The maximum  term of the stock  options is 5 years and the stock  options may be
exercised at any time for a period of 5 years after the date of grant.

The activity in the Option Plan is as follows:


                                                        Exercise Price
                                             Number of Options   Per Share Range
                                             -----------------   ---------------
 Balances outstanding January 1, 2002           2,782,692         0.25 - 6.00
           Granted                                  - 0 -             n/a
           Cancelled                              828,500         4.03 - 5.25
                                                ----------        -----------

  Balances outstanding Dec. 31, 2002            1,954,192         0.25 - 6.00
           Granted                                  - 0 -             n/a
           Cancelled                              610,192         0.25 - 3.00
                                                ---------         -----------
  Balances outstanding Dec 31, 2003             1,344,000         1.00 - 5.00


         The Company has adopted the  disclosure  requirements  of SFAS No. 123,
"Accounting  for  Stock-Based  Compensation".  The  Company  applies  Accounting
Principles  Board Opinion No. 25 and related  interpretations  in accounting for
its Option Plan and Program.  Had  compensation  for the Company's stock options
been determined based on the fair value at the grant dates,  consistent with the
provisions  of SFAS No. 123, the  Company's  consolidated  net loss and loss per
common share would have been adjusted to the pro forma amounts indicated below:


<PAGE>




                                                        For the Years
                                                      Ended December 31,
                                           -------------------------------------
                                                2003                  2002
                                           --------------      -----------------
      Net Loss:
          As reported                      $  (97,202)          $    (1,837,737)
          Pro forma                           (97,202)               (1,837,737)

 Basic and diluted loss per common share:

                                                        For the Years
                                                      Ended December 31,
                                           -------------------------------------
                                                2003                  2002
                                           -------------------------------------

          As reported                      $  (0.0024)           $  (0.06)
          Pro forma                           (0.0024)              (0.06)

The fair value of each  option  grant is  estimated  on the grant date using the
Black-Scholes option pricing model with the following assumptions for grants:

                                                      For the Years
                                                     Ended December 31,
                                           -------------------------------------
                                               2003                   2002
                                           -------------------------------------
          Volatility                           n/a                     n/a
          Interest rate                        n/a                     n/a
          Dividends                            n/a                     n/a
          Expected term                        n/a                     n/a


10. STOCK WARRANTS:
    --------------

 The following table summarizes common stock warrant activity:


                                                                      Exercise
                                                    Shares             Prices
                                                 --------------      -----------
Warrants outstanding as of January 1, 2002          3,251,198
         Granted                                    1,750,250        0.02 - 0.05
         Cancelled                                    629,672        1.25 - 4.00
                                                 -------------      ------------

Warrants outstanding as of December 31, 2002        4,389,635        0.02 - 3.00
         Granted                                      333,250        0.002
         Cancelled                                  1,338,859        1.06 - 3.00
                                                   -------------    ------------
Warrants outstanding as of December 31, 2003        3,384,026       0.002 - 2.61



<PAGE>



11. GOING CONCERN STATUS - FUTURE OPERATIONS
    ----------------------------------------
The Company discontinued  substantially all of its operations during 2002 and is
attempting to reorganize its ongoing operations to attain  profitability.  Since
its  inception,  the Company has not been operated  profitably.  As shown in the
accompanying financial statements, the company has incurred net operating losses
of $97,202  and  $1,844,373  for the years  ended  December  31,  2003 and 2002,
respectively.

The Company has a  stockholders'  deficit of  $7,496,783  and a working  capital
deficiency of $7,496,783  at December 31, 2003.  There can be no assurance  that
commercial  viability  can  be  demonstrated  for  the  Company's  products  and
services,  and there can be no  assurance  that the  Company  will ever  achieve
profitability on a sustained basis, if at all.

The  Company's  status  as a  going  concern  is  dependent  on its  ability  to
successfully  implement a marketing  plan and  generate  sufficient  revenues to
operate on a profitable basis, continued financial support by officers and major
shareholders and raising of additional funds for working capital.  The financial
statements  do not include any  adjustments  that might be necessary  should the
Company be unable to continue as a going concern.


12. SUBSEQUENT EVENTS:
    -----------------

New Porter Capital Loans

On April 12,  2004,  PCC  agreed to extend to  Paradise  a line of credit in the
amount of five  million  dollars  upon its normal  business  terms for  accounts
receivable financing for the purposes of acquisitions by Paradise.

New Mezzanine Loans

On April 12, 2004,  Porter Capital  Corporation  agreed to provide  $40,000 as a
secured loan for two years at an interest rate of 10% per annum. The interest is
payable quarterly in arrears,  in cash or stock, at the lenders option. PCC will
receive  warrants  to  purchase  500,000  shares  of the  company's  stock at an
exercise price of $0.002 per share. The warrants expire four years from the date
of issuance. This loan was provided for the company's working capital needs. All
of these funds have already been advanced to the Company.

On April 12, 2004, MME, Inc. agreed to provide $80,000 as a secured loan for two
years at an interest rate of 10% per annum. The interest is payable quarterly in
arrears,  in cash or stock, at the lenders option.  PCC will receive warrants to
purchase  1,000,000 shares of the company's stock at an exercise price of $0.002
per share.  The warrants expire four years from the date of issuance.  This loan
was provided for the company's working capital needs.

On April 12, 2004, MME, Inc. agreed to provide up to an additional $880,000 as a
secured loan for two years at an interest rate of 10% per annum. The interest is
payable quarterly in arrears, in cash or stock, at the lenders option. MME, Inc.
will receive warrants to purchase  1,000,000 shares of the company's stock at an
exercise price of $0.002 per share. The warrants expire four years from the date
of issuance. This loan is being provided for the company's working capital needs
and to fund acquisitions for Paradise.

Executive Officers

On January 2, 2004, the Board of Directors  ratified the appointment of Julia M.
Belden as Secretary of the Corporation and Chief Financial Officer.  The Company
has agreed to pay the Secretary  $120,000 per year.  The Company has been unable
to make this payment.