SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                              --------------------
                                   FORM 10-QSB

    [X] Quarterly Report under Section 13 or 15(d) of the Securities Exchange
                                   Act of 1934

                       For the period ended June 30, 2004

   [ ] Transition report under Section 13 Or 15(d) of the Securities Exchange
                                   Act of 1934

         For the transition period from                to
                                        --------------    --------------

                        Commission file number 000-24727

                         Raven Moon Entertainment, Inc.
                         -------------------------------
             (Exact name of registrant as specified in its charter)

        Florida                                           59-348779
 ----------------------                      ----------------------------------
(State of incorporation)                    (I.R.S. Employer Identification No.)

                      120 International Parkway, Suite 220
                                Heathrow, Florida                     32746
                     --------------------------------------         --------
                    (Address of principal executive offices)       (Zip Code)

         Issuer's telephone number, including area code: (407) 304-4764
                                                        ----------------

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

Title of Class:                                      Name of each exchange
                                                     on which registered:

Common Stock, par value $.0001                                None

Indicate by check mark whether the Registrant (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 |X| No |_|

Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). Yes [ ] No [X].

     The number of shares outstanding of the Registrant's Common Stock as of
August 18, 2004 was [191,490,171.]

Transitional Small Business Disclosure Format:      Yes |__|  No | X |

<PAGE>

                                TABLE OF CONTENTS

Part I   FINANCIAL INFORMATION                                              Page

Item 1   Financial Statements.............................................     2

         Consolidated Balance Sheet.......................................     2

         Consolidated Statements of Operations............................     3

         Consolidated Statements of Changes in Deficit in Stockholders'
         Equity...........................................................     4

         Consolidated Statements of Cash Flows............................     5

         Notes to Consolidated Financial Statements.......................     6

Item 2   Management Discussion and Analysis of Financial Condition and
         Results of Operations............................................    26

Item 3   Controls and Procedures..........................................    28


Part II    OTHER INFORMATION

Item 1   Legal Proceedings................................................    29

Item 2.  Changes in securities............................................    29

Item 3   Defaults on Senior Securities....................................    29

Item 4.  Submission of Matters to Vote of Security Holders................    29

Item 5.  Other Information................................................    29

Item 6   Exhibits and Reports on Form 8-K.................................    29


SIGNATURE.................................................................    30

CERTIFICATIONS

                                       i

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                                     Part I.

Item 1.  Financial Statements



                             RAVEN MOON ENTERTAINMENT, INC.
                               Consolidated Balance Sheet
                                      June 30, 2004
                                       (unaudited)



                                         ASSETS


<S>                                                                       <C>
Cash and cash equivalents                                                 $     58,875
Other receivables                                                               23,200
                                                                          ------------
                                                                          $     82,075
                                                                          ============

                    LIABILITIES AND DEFICIT IN STOCKHOLDERS' EQUITY

Accrued expenses payable to officers                                      $    958,275
Accrued interest payable                                                        27,000
Notes payable                                                                   60,000
Loans from shareholders                                                         62,000
Advance from Class B Members of LLC                                            235,000
                                                                          ------------

                 Total liabilities                                           1,342,275


COMMITMENTS AND CONTINGENCIES (see note 7)

DEFICIT IN STOCKHOLDERS' EQUITY
     Preferred stock, $.0001 par value, authorized 16,000,000 shares;
          issued and outstanding 9,734                                               1
     Convertible series B Preferred stock, $.0001 par value, authorized
          2,000,000 shares; issued and outstanding 44,000                            4
     Common stock, $.0001 par value, authorized 200,000,000 shares;
          issued and outstanding 169,630,679                                    16,963
     Additional paid-in capital                                             21,268,574
     Accumulated deficit                                                   (22,545,742)
                                                                          ------------

                 Total deficit in stockholders' equity                      (1,260,200)

                                                                          $     82,075
                                                                          ============


See accompanying notes

                                           2

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                                            RAVEN MOON ENTERTAINMENT, INC.
                                         CONSOLIDATED STATEMENTS OF OPERATIONS
                           For the six months and three months ended June 30, 2004 and 2003
                                                      (unaudited)



                                                                   Six months ended           Three months ended
                                                             --------------------------    --------------------------
                                                               June 30,       June 30,       June 30,       June 30,
                                                                 2004           2003           2004           2003
                                                             -----------    -----------    -----------    -----------

REVENUES:
          <S>                                                 <C>            <C>            <C>            <C>
          Sales of plush toys                                $     1,609    $   204,275    $     1,539    $        38
          Sale of rights to related party to manufacture,
               market and sell video, cd, and dvd products          --          810,056           --             --
                                                             -----------    -----------    -----------    -----------

                                                                   1,609      1,014,331          1,539             38

COST OF GOOD SOLD                                                    402        130,376            402            709
                                                             -----------    -----------    -----------    -----------

GROSS PROFIT                                                       1,207        883,955          1,137           (671)


EXPENSES:
          Consulting fees                                        901,392        481,610        368,115         58,650
          Production costs                                     2,858,213        345,994      1,206,669         97,000
          Option rights to intellectual property                 840,000           --          840,000           --
          Interest                                                 3,000          3,604          1,500          1,804
          General and administrative expense                     593,057        382,078        334,465        214,439
                                                             -----------    -----------    -----------    -----------

          Total costs and expenses                             5,195,662      1,213,286      2,750,749        371,893
                                                             -----------    -----------    -----------    -----------
Net loss before proportionate share of Clubhouse
     Videos, Inc.'s loss and discontinued operations          (5,194,455)      (329,331)    (2,749,612)      (372,564)

Proportionate share of Clubhouse Videos, Inc.'s loss             (29,933)          --             --             --
                                                             -----------    -----------    -----------    -----------

Net loss before discontinued operations                       (5,224,388)      (329,331)    (2,749,612)      (372,564)

Discontinued operations                                             --        1,413,952           --        1,977,233
                                                             -----------    -----------    -----------    -----------

Net (loss) income                                            $(5,224,388)   $ 1,084,621    $(2,749,612)   $ 1,604,669
                                                             ===========    ===========    ===========    ===========

Net loss per share before proportionate share of Clubhouse
     Videos, Inc.'s loss and discontinued operations         $   (0.0445)   $   (0.0239)   $   (0.0192)   $   (0.0245)
                                                             ===========    ===========    ===========    ===========

Proportionate share of Clubhouse Videos, Inc.'s loss
      per share                                              $   (0.0003)   $      --      $      --      $      --
                                                             ===========    ===========    ===========    ===========

Discontinued operations per share                            $      --      $    0.1028    $      --      $    0.1298
                                                             ===========    ===========    ===========    ===========

Net (loss) income per share                                  $   (0.0448)   $    0.0788    $   (0.0019)   $    0.1053
                                                             ===========    ===========    ===========    ===========


See accompanying notes

                                                          3

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                                   RAVEN MOON ENTERTAINMENT, INC.
                  CONSOLIDATED STATEMENTS OF CHANGES IN DEFICIT IN STOCKHOLDERS' EQUITY
                           For the six months ended June 30, 2004 and 2003
                                             (unaudited)



                                                                             Preferred Stock
                                                                        ---------------------------
                                              Preferred Stock                    Series B
                                        ----------------------------    ---------------------------
                                           Shares          Amount          Shares         Amount
                                        ------------    ------------    ------------   ------------
<S>                                          <C>        <C>                <C>         <C>
Balance December 31, 2002                    120,495    $         12            --     $       --

     Common stock options granted
        for expenses                            --              --              --             --
     Common stock options granted
        to related party                        --              --              --             --
     Shares issued to related parties
        for expenses                            --              --              --             --
     Shares issued for expenses                 --              --              --             --
     Exercise of options                        --              --              --             --
     Exercise of options related
        party                                   --              --              --             --
     Shares retired                         (100,000)            (10)             10           --
     Net loss for the period                    --              --              --             --
                                        ------------    ------------    ------------   ------------

Balance June 30, 2003                        120,495    $         12            --     $       --
                                        ============    ============    ============   ============


Balance December 31, 2003                    119,695    $         12            --     $       --

     Preferred stock retired                (109,961)            (11)           --             --
     Private placement                          --              --            44,000              4
     Common stock options granted for
        expenses                                --              --              --             --
     Common stock options granted to
        related party                           --              --              --             --
     Shares issued for accounts
        payable                                 --              --              --             --
     Shares issued for expenses                 --              --              --             --
     Shares issued for expenses to
        related parties                         --              --              --             --
     Exercise of options                        --              --              --             --
     Exercise of options by related
        party                                   --              --              --             --
     Net loss for the period                    --              --              --             --
                                        ------------    ------------    ------------   ------------

Balance June 30, 2004                          9,734    $          1          44,000   $          4
                                        ============    ============    ============   ============

                                                 4

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                                          RAVEN MOON ENTERTAINMENT, INC.
                         CONSOLIDATED STATEMENTS OF CHANGES IN DEFICIT IN STOCKHOLDERS' EQUITY
                                   For the six months ended June 30, 2004 and 2003
                                                    (unaudited)
                                                    (Continued)


                                                Common Stock           Additional
                                        ---------------------------      paid-in      Accumulated
                                            Shares         Amount        capital        deficit         Total
                                        ------------   ------------   ------------   ------------    ------------
<S>                                      <C>          <C>            <C>            <C>             <C>
Balance December 31, 2002                 10,594,639   $      1,059   $ 12,116,316   $(14,417,864)   $ (2,300,477)

     Common stock options granted
        for expenses                            --             --           60,300           --            60,300
     Common stock options granted
        to related party                        --             --          409,500           --           409,500
     Shares issued to related parties
        for expenses                         374,312             37         54,858           --            54,895
     Shares issued for expenses              500,000             50         60,725           --            60,775
     Exercise of options                   1,718,033            172         80,125           --            80,297
     Exercise of options related
        party                              2,593,016            260        229,080           --           229,340
     Shares retired                             --
     Net loss for the period                    --             --             --        1,084,621       1,084,621
                                        ------------   ------------   ------------   ------------    ------------

Balance June 30, 2003                     15,680,000   $      1,568   $ 13,010,914   $(13,333,243)   $   (320,749)
                                        ============   ============   ============   ============    ============


Balance December 31, 2003                 62,287,523   $      6,229   $ 16,901,874   $(17,321,354)   $   (413,239)

     Preferred stock retired                    --             --               11           --              --
     Private placement                          --             --          439,996           --           440,000
     Common stock options granted for
        expenses                                --             --          872,494           --           872,494
     Common stock options granted to
        related party                           --             --          573,008           --           573,008
     Shares issued for accounts
        payable                            1,816,138            182         82,022           --            82,204
     Shares issued for expenses           23,422,190          2,342        461,847           --           464,189
     Shares issued for expenses to
        related parties                   32,400,092          3,240        667,562           --           670,802
     Exercise of options                  30,480,603          3,048        813,612           --           816,660
     Exercise of options by related
        party                             19,224,133          1,922        456,148           --           458,070
     Net loss for the period                    --             --             --       (5,224,388)     (5,224,388)
                                        ------------   ------------   ------------   ------------    ------------

Balance June 30, 2004                    169,630,679   $     16,963   $ 21,268,574   $(22,545,742)   $ (1,260,200)
                                        ============   ============   ============   ============    ============


See accompanying notes

                                                     4(Con't)

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                                                RAVEN MOON ENTERTAINMENT, INC.
                                             CONSOLIDATED STATEMENTS OF CASH FLOWS
                             For the six months and the three months ended June 30, 2004 and 2003
                                                          (unaudited)



                                                                         six months ended             Three months ended
                                                                    --------------------------    --------------------------
                                                                      June 30,       June 30,       June 30,       June 30,
                                                                       2004           2003           2004           2003
                                                                    -----------    -----------    -----------    -----------

CASH FLOWS FROM OPERATING ACTIVITIES
    <S>                                                              <C>           <C>             <C>           <C>
    Net (loss) income                                                (5,224,388)   $ 1,084,621     (2,749,612)   $ 1,604,669
    Discontinued operations                                                --       (1,413,952)          --       (1,977,233)
    Adjustments to reconcile net loss to net cash used
        by operating activities:
          Decrease in deposit on inventory                                 --           28,300           --             --
          (Increase) in receivables from related party                     --           (3,603)          --           (3,603)
          Amortization and depreciation                                    --            1,560           --              583
          (Increase) in advance royalty payments to related party          --          (10,000)          --           (4,000)
          (Decrease) increase in accounts payable to third par          (29,500)       (10,500)          --          (67,713)
          Increase in accrued wages and salaries to officers            706,579        224,876        811,237        124,413
          Increase (decrease) in accrued interest to officers
            and reated parties                                            3,000          3,000          1,500          1,200
          (Decrease) increase in unearned sales rights                     --         (543,777)          --           44,500
          Common stock options granted for expenses                     872,494        469,800           --           31,500
          Common stock options granted for expenses to related
            parties                                                     573,008           --             --             --
          Shares issued for expenses                                    464,189           --          457,689           --
          Shares issued for expenses to related parties                 670,802        115,670        670,802         20,773
                                                                    -----------    -----------    -----------    -----------

                 Net cash used by operations                         (1,963,816)       (54,005)      (808,384)      (224,911)


CASH FLOW TO INVESTMENT ACTIVITIES
    Increase in investment in Club House Video, Inc.                       --         (218,000)          --             --


CASH FLOWS FROM FINANCING ACTIVITIES
     Proceeds from sales of Class B Memberships                         230,000           --          230,000          4,000
     Payments to Class B Members                                           --          (87,000)          --             --
     Proceeds from private placement                                    440,000           --          440,000           --
     Proceeds from exercise of warrants                                    --             --             --             --
     Proceeds from exercise of options                                1,274,730        309,637           --           67,297
     Advance payments for exercise of options                              --           40,703           --           40,703
     Notes payable - officers                                              --            4,907           --           22,907
                                                                    -----------    -----------    -----------    -----------

                 Net cash provided by financing act                   1,944,730        268,247        670,000        134,907


     Net (decrease) in cash                                             (19,086)        (3,758)      (138,384)       (90,004)

     Cash and cash equivalents at beginning of period                    77,961         12,727        197,259         98,973
                                                                    -----------    -----------    -----------    -----------

     Cash and cash equivalents at end of period                     $    58,875    $     8,969    $    58,875    $     8,969
                                                                    ===========    ===========    ===========    ===========


See accompanying notes

                                                               5

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                         RAVEN MOON ENTERTAINMENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             June 30, 2004 and 2003
                                   (unaudited)


Note 1 -- DESCRIPTION OF THE COMPANY

Raven Moon Entertainment, Inc. and its wholly owned subsidiaries are primarily
engaged in the production and development of Family Values television programs
and video entertainment products. The market for these products is worldwide,
although the company will devote most of its efforts within the continental
United States.

NOTE 2 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION -- The accompanying consolidated financial
statements include the accounts of Raven Moon Entertainment, Inc. and its wholly
owned subsidiaries JB Toys, LLC and Raven Animation, Inc. (the Company). JB
Toys, LLC will cease to exist on December 5, 2012. Inter-company transactions
and balances have been eliminated in consolidation.

In the opinion of management, the interim financial statements include all
adjustments, consisting of normal recurring adjustments, necessary for a fair
presentation of the financial position, results of operations and cash flows in
the accompanying unaudited consolidated financial statement.

REVENUE RECOGNITION -- Revenue from distribution of plush toys are recognized
upon receipt of payment or delivery of product, which does not vary
significantly from the time the products are shipped.

Revenue from the distribution of videos is recognized as earned under the
criteria established by SOP 00-2. The Company's revenue cycle is generally one
to three years, with the expectation that substantially all revenue will be
recognized in the first two years of individual videos. In accordance with SOP
00-2, the Company considers revenue earned when all of the following have
occurred:

o    The Company has a valid sale or licensing agreement in place.
o    The video is complete and in accordance with the agreement with the
     customer.
o    The video has been delivered or is deliverable.
o    The license period has begun.
o    The revenue is fixed or determinable and collection is reasonably assured.

Revenue from Clubhouse Videos, Inc., formerly Raven Moon Home Video Products,
LLC, a wholly owned subsidiary of the Company which was spun-off into a separate
corporation is not consolidated in these financial statements (see note 4),
accounted for all the revenue from sales of plush toys and the rights to
manufacture, market and sell videos, CDs and DVDs for the six-month period ended
June 30, 2003.

                                       6

<PAGE>


                         RAVEN MOON ENTERTAINMENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             June 30, 2004 and 2003
                                   (unaudited)

NOTE 2 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

PRODUCTION COSTS -- Production costs includes costs to develop and produce video
entertainment products. These costs were paid primarily to companies and
individuals hired to perform a specific task. The Company out-sources these
activities in order to reduce overhead costs. Production costs are amortized by
the ratio of current year's revenue bear to management's estimated ultimate
revenue. Because the Company cannot demonstrate through its' experience the
ultimate revenue from the video entertainment products, it has elected to
expense all production costs.

STOCK FOR COMPENSATION -- The Company accounts for the issuance of common or
preferred stock for goods and services at the fair market value of the goods or
services provided or the fair market value of the common or preferred stock
issued, whichever is more reliably determined.

UNCLASSIFIED BALANCE SHEET -- In accordance with the provisions of SOP 00-2, the
Company has elected to present an unclassified balance sheet.

INTELLECTUAL PROPERTY -- Intellectual property is recorded at the lower of cost
or net realizable value. The Company performs an impairment test of intellectual
property quarterly. SFAS 142 requires the Company to compare the fair value of
the intellectual property to its carrying amount to determine if there is
potential impairment. If the carrying amount of the intellectual property
exceeds its fair value, an impairment loss is recognized. Fair values for
intellectual property are determined based on discounted cash flows, market
multiples or appraised values as appropriate. Because the Company cannot
demonstrate through its' experience the ultimate revenue from intellectual
property it has elected to expense all costs associated with intellectual
property.

MANAGEMENT ESTIMATES -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect certain reported amounts and disclosures.
Actual results could differ from those estimates.

STOCK-BASED COMPENSATION -- The Company accounts for stock options issued to
employees under Statement of Financial Accounting Standards 123, wherein such
options are valued based upon the Black-Scholes option pricing model.


CASH EQUIVALENTS -- The Company considers all highly liquid investments with
original maturities of three months or less to be cash equivalents.

                                       7

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                         RAVEN MOON ENTERTAINMENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             June 30, 2004 and 2003
                                   (unaudited)


NOTE 2 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

NET (LOSS) INCOME PER SHARE -- Primary earnings-per-share computations are based
on the weighted average number of shares outstanding during the period. The
weighted average number of shares outstanding was 116,600,245 and 13,759,406 for
the six months ended June 30, 2004 and 2003, respectively. The weighted average
number of shares outstanding was 143,040,041 and 15,229,443 for the three months
ended June 30, 2004 and 2003, respectively.

INCOME TAXES -- The Company has incurred approximately $22,500,000 of net
operating losses which may be carried forward and used to reduce taxable income
in future years. Deferred tax assets created by the net operating losses are
offset by an equal valuation allowance.

STOCK SPLITS -- The Company adopted a 50 to 1 reverse stock split on June 30,
2003 for common and preferred stock and the Company adopted a 2 for 1 common
stock split for shareholders of record on September 19, 2003. All applicable
share and per-share data in these consolidated financial statements have been
restated to give effect to these stock splits.

INVESTMENTS IN COMMON STOCK -- The investment in Clubhouse Videos, Inc. is 6% of
the outstanding common stock, and because the Company can significantly
influence the operating and financial policies of Clubhouse Videos, Inc. the
Company accounts for their investment under the equity method.

RECLASSIFICATIONS -- Certain amounts reported in previous years have been
reclassified to the 2003 financial statement presentation.

CREDIT RISKS -- Financial instruments, which potentially subject the Company to
concentrations of credit risk, consist of cash and cash equivalents. The Company
maintains its cash in bank deposit accounts, which, at times, may exceed
federally insured limits. It has not experienced any losses in such accounts.
The Company believes that it is not exposed to any significant credit risk on
cash and cash equivalents.

NEW ACCOUNTING PRONOUNCEMENTS

In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133 on
Derivative Instruments and Hedging Activities." SFAS No. 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 SFAS
No. 133, "Accounting for Derivative Instruments and Hedging Activities." SFAS
No. 149 is effective for contracts entered into or modified after June 30, 2003,
except as specified and for hedging relationships designated after June 30,
2003. Adoption of this statement did not have any material impact on the balance
sheet or statement of operations.

                                       8

<PAGE>


                         RAVEN MOON ENTERTAINMENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             June 30, 2004 and 2003
                                   (unaudited)


NOTE 2 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)


In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of Both Liabilities and Equity." SFAS 150
requires that certain financial instruments, which under previous guidance were
accounted for as equity, must now be accounted for as liabilities. The financial
instruments affected include mandatory redeemable stock, certain financial
instruments that require or may require the issuer to buy back some of its
shares in exchange for cash or other assets and certain obligations that can be
settled with shares of stock. SFAS 150 is effective for all financial
instruments entered into or modified after May 31, 2003. Otherwise, it was
effective at the beginning of the first interim period beginning after June 15,
2003. Adoption of this statement did not have any material impact on the balance
sheet or statement of operations.

The Company adopted Financial Interpretation No. ("FIN") 45, "Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others" for guarantees issued or modified after
December 31, 2002. This Interpretation specifies that a guarantor is required to
recognize, at the inception of a guarantee, a liability for the fair value of
the obligation undertaken in issuing the guarantee. The Interpretation also
modified the disclosure requirements about a guarantor's obligations under
agreements. The financial effect of adopting FIN 45 did not materially affect
the consolidated financial statements.

In December 2003, the FASB revised FIN 46, "Consolidation of Variable Interest
Entities." FIN 46 requires the Company to consolidate a variable interest entity
if the Company is subject to a majority of the risk of loss from the variable
interest entity's activities or entitled to receive a majority of the entity's
residual returns or both. FIN 46 is effective immediately for all new variable
interest entities created or acquired after January 31, 2003. For variable
interest entities created or acquired prior to February 1, 2003, the provisions
of FIN 46 must be applied for the first interim or annual period beginning after
December 15, 2004 for small issuers. The Company does not currently have any
variable interest entities and, accordingly, the adoption of FIN 46 did not have
a significant impact on the Company's consolidated financial position or results
of operations.

In November 2003, during discussions on EITF Issue No. 03-01, "The Meaning of
Other-Than-Temporary Impairment and Its Application to Certain Investments," the
EITF reached a consensus which requires certain quantitative and qualitative
disclosures for debt and marketable equity securities classified as

                                       9

<PAGE>


                         RAVEN MOON ENTERTAINMENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             June 30, 2004 and 2003
                                   (unaudited)


NOTE 2 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

available-for-sale or held-to-maturity under SFAS 115 and SFAS 124 that are
impaired at the balance sheet date but for which an other-than-temporary
impairment has not been recognized. The consensus on quantitative and
qualitative disclosures is effective for fiscal years ending after December 15,
2003 and comparative information for earlier periods presented is not required.
The Company currently does not have any impaired investments and thus the
adoption of this consensus did not have a material impact on the financial
statements.

Note 3 -- BUSINESS AND OPERATIONS

The Company is currently working to establish the following lines of business:

                           Home Video and Television Productions
                           Internet Retail Sales
                           Music CDs
                           Plush Toys

These financial statements are prepared on a going concern basis that assumes
that the Company will be able to realize assets and discharge liabilities in the
normal course of business. Accordingly, it does not give effect to adjustments,
if any, that would be necessary should the Company be unable to continue as a
going concern and therefore be required to realize assets and liquidate its
liabilities, contingent obligations and commitments in other than the normal
course of business and the amounts which may be different from those shown in
these financial statements. The ability to continue as a going concern is
dependent on its ability to:

         Obtain additional debt and equity financing.
         Generate profitable operations in the future.

The Company has initiated several actions to generate working capital and
improve operating performances, including equity and debt financing and cost
reduction measures. There can be no assurance that the company will be able to
successfully implement its plan, or if successfully implemented the Company will
achieve its goals. Furthermore, if the Company is unable to raise additional
funds it may be required to reduce its workforce, reduce compensation levels,
reduce dependency on outside consultants, modify its growth and operating plans,
and even be forced to terminate operations completely.

                                       10

<PAGE>


                         RAVEN MOON ENTERTAINMENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             June 30, 2004 and 2003
                                   (unaudited)


Note 4 -- DISCONTINUED OPERATIONS

On January 14, 2003, the Company announced its intention to split into two
independent publicly traded companies by spinning off Raven Moon Home Video
Products, LLC as a dividend to shareholders. On April 25, 2003 the Company
completed the spin-off of Raven Moon Home Video Products, LLC. The spinoff was
accomplished by the Company's contribution of Raven Moon Home Video Products,
LLC to Clubhouse Video, Inc. All of the common stock was then distributed to the
Class B Members of the LLC on a basis of 152,362 per unit of the LLC and the
shareholders of the Company received one share of Clubhouse Video, Inc. for
every 100 shares of common stock held in the Company. As a result of the
spin-off, the Company's June 30, 2003, 2003 financial statements have been
prepared with Raven Moon Home Video Products, LLC results of operations and cash
flows shown as "discontinued operations". All historical financial statements
presented have been restated to conform to this presentation, with the
historical assets and liabilities of Raven Moon Home Video Products, LLC
presented on the balance sheet as "Net liabilities from discontinued
operations". Summarized financial information for discontinued operations at
June 30, 2004 and 2003 is as follows:

                                               2004                    2003
                                               ----                    ----

         Net income (loss)                 $        -             $  1,413,952
                                           ============           ============


Note 5 -- INVESTMENT IN CLUBHOUSE VIDEOS, INC.

During the six-month period ended June 30, 2003 the Company purchased 21.8 units
of the LLC for $218,000. At June 30, 2003 the Company had purchased a total of
36.8 units of Raven Moon Home Video Products, LLC for $368,000. These purchases
were converted into common stock of Clubhouse Video, Inc. as a result of the
spin-off of the former wholly owned subsidiary. (See Note 4) Following is a
schedule of ownership and related party ownership for the six months ended June
30, 2004 and 2003:

                                                    2004               2003
                                                    ----               ----

Percent of Ownership                                27.5%              27.5%

Proportionate share of Clubhouse
          Videos, Inc.'s loss                     ($17,759)          ($324,416)

                                       11

<PAGE>


                         RAVEN MOON ENTERTAINMENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             June 30, 2004 and 2003
                                   (unaudited)



Note 5 -- INVESTMENT IN CLUBHOUSE VIDEOS, INC. (continued)

                                                     2004             2003
                                                     ----             ----

Carrying value of Investment
In Clubhouse Videos, Inc.                        $      -         $    39,000

Underlying equity in net assets of
Clubhouse Videos, Inc.                           $      -         $    39,000

At June 30, 2004 the Company has available loss of $65,218, which will be offset
against future proportionate earnings of Clubhouse Videos, Inc.

Following is summarized information about Clubhouse Videos, Inc. assets,
liabilities and results of operations as of June 30, 2004 and 2003:

                                                     2004             2003
                                                     ----             ----

         Assets                                  $   141,372      $   271,677

         Liabilities                             $   984,503      $   130,912

         Results of operations (loss)            $   (64,579)     $  (634,241)


At June 30, 2004 Clubhouse Videos, Inc. has 115,000 shares of Preferred Stock
Series A outstanding. The conversion premium for these share is 125%. Conversion
is based upon the amount invested ($115,000) divided by the average close price
for the first 29 days of trading, then adjusted by the premium. Conversion is
automatic on the thirtieth day of trading. The effect of this conversion cannot
be determined at this time.

                                       12

<PAGE>


                         RAVEN MOON ENTERTAINMENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             June 30, 2004 and 2003
                                   (unaudited)


Note 6 -- DEBT

Debt for the company consists of the following:

Notes payable to third parties bear interest at 10% annually. These are demand
notes, and are unsecured.

Loans from shareholders are non-interest bearing, but the shareholders received
additional shares of preferred stock and common stock in 2000 and are also
entitled to gross revenue royalty fees of the gross revenue of the Company for
ten years. The royalties range from .0125% to .5% of gross revenues. No
royalties were earned in 2004 and 2003.

There are two types of Class B units:

1)   The cash investments for Class B members of LLC are non-interest bearing
     loans. The members are entitled to receive all distributions from gross
     profits of the LLC until the members have received an amount equal to their
     initial cash investment. Once the Class B members, who invested cash have
     been repaid, the Class B members are entitled to annually receive 85% of
     all gross profits of the LLC derived from the sale of products. The Company
     has received $275,000 of cash investments from Class B members and has
     repaid $40,000 as of June 30, 2004.

2)   The members who exchange services or rights to intellectual property for
     Class B units are not entitled to receive any distributions from gross
     profits of the LLC unit the members who invested cash have received their
     investment. Once the Class B members, who invested cash have been repaid,
     the Class B members are entitled to annually receive 85% of all gross
     profits of the LLC derived from the sale of products. The Company has
     exchanged 100 units to WEE-OOO, LTD, a related party, for the rights to
     Gina D, 50 units to Mike Gibilisco for the rights to the BoBo Blocks, 200
     units to Bernadette DiFrancesco, a related party, for the rights to the
     Cuddle Bugs, 7.5 units to members of the Board of Directors for services
     provided in the last three years and 15 units to Joseph and Bernadette
     DiFrancesco for a 10 year license for Mr. Bicycle Man, as of June 30, 2004.

The Class B members have no voting rights. The cash advances from Class B
members have been recorded as a liability because all advances must be repaid
prior to any distributions to the parent company.

                                       13

<PAGE>


                         RAVEN MOON ENTERTAINMENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             June 30, 2004 and 2003
                                   (unaudited)


Note 7 -- RELATED PARTY TRANSACTIONS

The Company is affiliated through ownership of shares of the Company's common
stock by the following companies:


                   J. & B. DiFrancesco, Inc.
                   WEE-OOO, LTD.
                   Beyond the Kingdom, Inc.
                   T.V. Toys, Inc.
                   2221 Music
                   Clubhouse Videos, Inc.

The Company has incurred aggregate consulting, production, marketing and
management fees with officers, directors and other related parties for the six
months ended June 30, 2004 and 2003:

                                                 2004                  2003
                                                 ----                  ----

                                              $2,509,808            $  942,567
                                              ==========            ==========

The Company paid Gina Mouery, who is the hostess for the "Gina D's Kids Club
Show" and the daughter of Joey DiFrancesco, President and Chief Executive
Officer of the Company, $12,000 for the six months ended June 30, 2004 and 2003,
respectively. The advance on future royalties - related party was charged to
production expense because the Company cannot demonstrate through its experience
the ultimate revenue from the video entertainment products.

The Company agreed to pay or reimburse Ms. Mouery $752 a month for a leased car.
The Company paid approximately $4,512 for the six months ended June 30, 2004
which is included in the general and administrative expenses.

On May 1, 2004 Gina Mouery entered into a ten month consulting agreement with JB
Toys, LLC and Raven Animation, Inc. Ms. Mouery is to assist the Company as a
Co-executive Producers and Promotional Celebrity Talent for promotion and
production of the Company's products and services. Ms. Mouery will be paid
$1,000,000 of S-8 free trading shares in ten equal installments of common Stock
@ a 50% discount from the closing bid price for the preceding ten days.

                                       14

<PAGE>


                         RAVEN MOON ENTERTAINMENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             June 30, 2004 and 2003
                                   (unaudited)


Note 7 -- RELATED PARTY TRANSACTIONS (continued)

During the six months ended June 30, 2004 and 2003 Gina Mouery was granted
options for 19,224,133 and 1,800,000 shares of common stock for talent fees,
respectively. The fair value of these options at June 30, 2004 and 2003 was
$573,008 and $94,500, respectively, and was charged to production expense
because the Company cannot demonstrate through its experience the ultimate
revenue from the video entertainment products.

During the six months ended June 30, 2004 and 2003 Gina Mouery exercised
19,224,113 options for $458,070 and 1,519,365 options for shares of common stock
for $59,000, respectively.

During the six months ended June 30, 2004 Gina Mouery was granted 20,360,992
shares of common stock valued at $436,000. The $436,000 was charged to
production expense because the Company cannot demonstrate through its experience
the ultimate revenue from the video entertainment products.

On April 11, 2001, the Company entered into an agreement with Joseph and
Bernadette DiFrancesco in exchange for a one year exclusive option to the
program, certain cartoon characters and music publishing rights related to songs
written and used in "Gina Ds Kids Club Show", which have been created by Joseph
and Bernadette DiFrancesco. The Company was not able to meet its requirements
under the option agreement, and the option expired April 11, 2002.

On May 17, 2002 the Company made an addendum to the Option Agreement, in
exchange for $100,000 note payable to Joseph and Bernadette DiFrancesco and a
non-refundable grant of 800,000 shares of common stock, valued at $390,000, and
provided that the terms, conditions and payment due in the Agreement dated April
11, 2001 are met and fulfilled by April 11, 2003 the option agreement granted to
the Company on April 11, 2001 shall be in force for a period of twenty (20)
years. Because the Company cannot demonstrate through its experience the
ultimate revenue from the video entertainment products it has elected to charge
option rights to intellectual properties $490,000 during 2002.

On March 4, 2004 the Board of Directors approved extending the agreement with
Joseph and Bernadette DiFrancesco, which expires April 11, 2004, in regards to
the rights to the Gina D's Kids Club. The extension as for a ten-year period
without restrictions or requirements, except for bankruptcy, insolvency or
takeover of the Company by a person or entity not approved by the CEO, under the
following terms:

o    Joseph and Bernadette DiFrancesco received 100 units of JB Toys,

                                       15

<PAGE>



                         RAVEN MOON ENTERTAINMENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             June 30, 2004 and 2003
                                   (unaudited)


Note 7 -- RELATED PARTY TRANSACTIONS (continued)

o    Joseph and Bernadette DiFrancesco received 10,000,000 shares of common
     restricted Raven Moon Entertainment, Inc stock on April 10, 2004, and
     Joseph and Bernadette DiFrancesco shall receive a fee of $750,000 per year
     for ten years beginning in January 2004 for a production royalty or 10% of
     all gross revenues from worldwide licensing and merchandising revenues
     received by Raven Moon Entertainment, Inc. or JB Toys, LLC, whichever is
     greater. The shares of stock were valued at $195,000 and charged to
     intellectual property expense.


On June 1, 2004 the agreement with Joseph and Bernadette DiFrancesco for the
rights to Gina D' was amended. If the Company grants a license to any third
party for Gina D, the Company will pay Joseph and Bernadette DiFrancesco 50% of
that any revenues derived from the license.

On March 4, 2004 the Company, through its subsidiary JB Toys, LLC, granted to
WEE-OOO, LTD, a limited partnership owned by Joseph and Bernadette DiFrancesco,
a nonrefundable grant of 100 units of Class B memberships for the rights to
reproduce characters of Gina D for sale. (See Note 6.)

On August 13, 2003 the Company, through its subsidiary JB Toys, LLC, granted
Bernadette DiFrancesco 200 units of Class B memberships for the rights to the
"Cuddle Bugs." In addition Bernadette DiFrancesco is to receive 15% of the
revenues of JB Toys, LLC for a ten-year period.

On October 10, 2003 the Board of directors granted to WEE-OOO, LTD 400,000
shares of common stock for consulting services rendered. The shares were valued
at $31,200 and charged to consulting fees because the Company cannot demonstrate
through its experience the ultimate revenue from the video entertainment
products.

On June 1, 2004 the Company, through its subsidiary JB Toys, LLC, agreed to pay
Joseph and Bernadette DiFrancesco $100,000 and 15 units of Class B memberships
of JB Toys for the rights to Mr. Bicycle Man. In addition Joseph and Bernadette
DiFrancesco are to receive 15% of the revenues of JB Toys, LLC for a ten-year
period.

On June 1, 2004 the Company, through its subsidiary JB Toys, LLC, agreed to pay
Joseph and Bernadette DiFrancesco $250,000 and 10,000,000 of common restricted
stock of Raven Moon Entertainment, Inc. for the rights to "Amazon Challenge" and
"The Search for the Amazon Queen." In addition Joseph and Bernadette DiFrancesco
are to receive $100,000 per year beginning year two through year 10 plus 25% of
gross revenue derived by JB Toys for "Amazon Challenge" and "The Search for the
Amazon Queen." Finally, if JB Toys grants a license to any third party for "Gina
D's Kids Club" characters, DVD's, Videos and Music CD's, "Cuddle Bug"

                                       16

<PAGE>


                         RAVEN MOON ENTERTAINMENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             June 30, 2004 and 2003
                                   (unaudited)


Note 7 -- RELATED PARTY TRANSACTIONS (continued)


products, "Mr. Bicycle Man", or "Amazon Challenge" and "The Search For The
Amazon Queen" the Company will pay Joseph and Bernadette DiFrancesco 50% of any
revenues derived from the license.

On August 14, 2002 the Company entered into a Consulting and Marketing Agreement
with David Mouery, the son-in-law of Joey DiFrancesco, President and Chief
Executive Officer of the Company. The Company issued 600,000 shares of common
stock and options for 3,600,000 shares of common stock to David Mouery. The
option exercise price of the common stock is a 50% discount from the closing bid
price for the ten trading days immediately preceding the date of exercise. The
stock was valued at $195,000 and the options were valued at $369,000 and charged
to consulting expense.

On May 1, 2004 David Mouery entered into a twelve month consulting agreement
with JB Toys, LLC and Raven Animation, Inc. Mr. Mouery is to assist the Company
as entertainment attorney for legal matters and contracts for the Company's
products and services. Mr. Mouery will be paid $120,000 of S-8 free trading
shares in twelve equal installments of common Stock @ a 50% discount from the
closing bid price for the preceding ten days.

During the six months ended June 30, 2004 David Mouery was not granted any
options. During the six months ended June 30, 2003 David Mouery was granted
options for 5,400,000 shares of common stock for production services. The fair
value of these options was $315,000 and was charged to production expense
because the Company cannot demonstrate through its experience the ultimate
revenue from the video entertainment products.

During the six months ended June 30, 2004 David Mouery did not exercise any
options. During the six months ended June 30, 2003 David Mouery exercised
3,666,666 options for common stock for $170,340.

During the six months ended June 30, 2004 David Mouery was granted 2,039,100
shares of common stock valued at $39,762. The $39,762 was charged to consulting
expense because the Company cannot demonstrate through its experience the
ultimate revenue from the video entertainment products.

                                       17

<PAGE>


                         RAVEN MOON ENTERTAINMENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             June 30, 2004 and 2003
                                   (unaudited)


Note 7 -- RELATED PARTY TRANSACTIONS (continued)

The officers' and directors' were granted the following common stock warrants
for a three-year term:

         Date                 Common Stock Warrants    Exercise Price per Share
         ----                 ---------------------    ------------------------

       April 5, 2000                 300,000                     $1.10

       September 1, 2001             600,000                     $ .08

The directors' were granted the following common stock options for a ten-year
term:

         Date                 Common Stock Options     Exercise Price per Share
         ----                 --------------------     ------------------------

       November 29, 2002           2,000,000                     $ .13

These options were valued at $170,000 and charged to general and administrative
expense.

On September 16, 2003 the Board of directors issued $25,000 worth of common
stock for each of the last three years (150,000 shares which were eligible for
the 2 for 1 stock split) in exchange for surrendering any previously issued
options and warrants. These shares were valued at a total of $268,125 and
charged to consulting expense.

During the six-month period ended June 30, 2004 and 2003 loans from officers,
directors, senior management and related parties are summarized as follows:

                                                    2004            2003
                                                    ----            ----

              Balance at beginning of year       $     -         $   18,000
              Increase in loans                        -               -
              Payments on loans                        -            (18,000)
                                                 ----------      ----------
              Balance at end of period           $     -         $     -
                                                 ==========      ==========

In February of 2003 $40,000 of Class B Member Investment loan was repaid to
WEE-OOO, LTD from gross profits of JB Toys, LLC. In March an additional $51,000
of Class B Member Investment loan was paid to WEE-OOO, LTD from gross profits of
JB Toys, LLC.

                                       18

<PAGE>


                         RAVEN MOON ENTERTAINMENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             June 30, 2004 and 2003
                                   (unaudited)


Note 7 -- RELATED PARTY TRANSACTIONS (continued)

On June 1, 2004 the four song writers (two of the songwriters are Joseph and
Bernadette DiFrancesco) with 2221 Music amended their agreement. The amendment
calls for each song writer to receive 2,500,000 shares of common stock by
September 1, 2004 and to receive $2,500 per month from September 1, 2004 through
October 31, 2005.

Following is a schedule which summarizes the activity in accruals and payments
related to Joseph and Bernadette DiFrancesco, the officers of the Company, for
the six months ended June 30, 2004 and 2003:

                                                          2004          2003
                                                          ----          ----
         Beginning balance                             $  251,697    $  186,383
                  Accrued for administrative salary       298,598       248,832
                  Accrued production fee                  920,000          -
                  Payments to Officers                   (512,020)      (23,957)
                                                       ----------    ----------
         Beginning balance                             $  958,275    $  411,259
                                                       ==========    ==========

The balance due to the officers includes 10,000,000 shares of common stock,
these shares are part of the payment for the rights to "The Search for the
Amazon Queen." These shares have not been issued, but were valued at $195,000 on
June 1, 2004, the date of the agreement for the purchase of the rights to "The
Search for the Amazon Queen." The $195,000 was charged to "Option rights to
intellectual property" expense because the Company cannot demonstrate through
its experience the ultimate revenue from the video entertainment products.

Through the spinoff of Raven Moon Home Video Products, LLC and the subsequent
reclassification of net liabilities to discontinued operations (see Note 4) the
Company retired its debt of $1,958,800 to the Raven Moon Home Video Products,
LLC Class B Members on December 31, 2002. The retirement of debt was
accomplished by exchanging shares of common stock of the Company for the Class B
Members debt. (See Note 4). In addition, debt of the Company to Clubhouse
Videos, Inc. for $810,018 was retired in exchange for the rights to manufacture,
market and sell the first nine video, CD and DVD products produced by the
Company. The rights to future products purchased by the Clubhouse Videos, Inc.
from the Company will approximate $300,000 per DVD and $100,000 per CD plus 25%
of the gross sales of the product.

                                       19

<PAGE>


                         RAVEN MOON ENTERTAINMENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             June 30, 2004 and 2003
                                   (unaudited)


Note 8 - COMMITMENTS AND CONTINGENCIES

     a) The Company has entered into an employment contract with the officers,
     Joseph and Bernadette DiFrancesco. Under the terms of the agreement, the
     Company is obligated to make the following annual payments through November
     15, 2005:

                             2004          $612,000
                             2005          $627,000

     In addition, the officers are to receive a "Founders" royalty of 10% for
     any entertainment revenue received by the company for any entertainment
     project developed and or produced by the company during the term of this
     agreement. This royalty will be paid between November 16th and December
     31st in perpetuity.

     b) The Company has entered into various month to month verbal agreements
     with unrelated third parties to provide production, marketing and
     administrative services. Payments are made based on invoices rendered for
     specific services provided.

     c) On May 1, 2004 the Company entered into a three consulting agreements.
     These agreements required the individuals Marc Jablon, Mike Gibilisco, and
     Gina Mouery to provide executive assistants advice and marketing,
     production services and a broad range of talent, marketing, promotion,
     music and personal appearance services to the Company for ten months. The
     individuals Marc Jablon and Mike Gibilisco are to be paid $500,000 each
     Gina Mouery is paid $1,000,000. The payments will be S-8 free trading
     shares issued in ten equal installments of common Stock @ a 50% discount
     from the closing bid price for the preceding ten days, commencing on May 1,
     2004 and every month thereafter for nine months.

Note 9 - STOCK OPTION PLAN

The Company established a stock option plan for its executives, consultants, key
employees, directors and its affiliates. (The "2001 Stock Option Plan".) The
2001 Stock Option Plan allows for incentive stock options to be granted to
future participants at a price not less than 100% of the market value per share
on the date of the grant. No options have been granted to employees under this
plan.

                                       20

<PAGE>


                         RAVEN MOON ENTERTAINMENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             June 30, 2004 and 2003
                                   (unaudited)


Note 9 - STOCK OPTION PLAN (continued)


Non-statutory options are granted at prices and terms determined by the board of
directors. The following is a summary of options, granted, exercised, cancelled
and outstanding:

                                                              Weighted  Average
                                             Shares             Exercise Price

Outstanding at December 31, 2002            4,123,891             $  .0975

         Granted                           31,882,873             $  .1210

         Cancelled                         (2,937,862)            $  .1589

         Exercised                        (31,068,905)            $  .0548
                                          ------------

Outstanding at December 31, 2003            2,000,000             $  .1250


         Granted                           49,704,736             $  .0291

         Cancelled                               -                $  .0000


         Exercised                         49,704,736             $  .0255
                                           ----------

Outstanding at June 30, 2004                2,000,000             $  .1250
                                          ===========

The exercise price and the market value for common stock options granted in 2004
and 2003 is as follows:

    Options granted                Exercise Price             Fair Market Value
    ---------------                --------------             -----------------

        2004
        ----

     7,383,838         1/2 of previous 10 days average price      $  .04
    12,479,799         1/2 of previous 10 days average price      $  .05
    19,893,997         1/2 of previous 10 days average price      $  .06
     8,044,026         1/2 of previous 10 days average price      $  .07

                                       21

<PAGE>


                         RAVEN MOON ENTERTAINMENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             June 30, 2004 and 2003
                                   (unaudited)


Note 9 - STOCK OPTION PLAN (continued)


    Options granted                Exercise Price             Fair Market Value
    ---------------                --------------             -----------------

        2004
        ----

     1,903,076         1/2 of previous 10 days average price      $  .08

        2003
        ----

     1,800,000         1/2 of previous 10 days average price      $  .12
     4,299,999         1/2 of previous 10 days average price      $  .10
     3,343,529         1/2 of previous 10 days average price      $  .07
     2,727,197         1/2 of previous 10 days average price      $  .09
     1,800,000         1/2 of previous 10 days average price      $  .03
     4,422,706         1/2 of previous 10 days average price      $  .28
        88,956         1/2 of previous 10 days average price      $  .26
        69,780         1/2 of previous 10 days average price      $  .19
       983,666         1/2 of previous 10 days average price      $  .16
     1,050,877         1/2 of previous 10 days average price      $  .17
     4,071,856         1/2 of previous 10 days average price      $  .14
     1,000,000         1/2 of previous 10 days average price      $  .13
     1,052,630         1/2 of previous 10 days average price      $  .08
     3,780,821         1/2 of previous 10 days average price      $  .06
     1,328,957         1/2 of previous 10 days average price      $  .04


The weighted average fair value of options granted during 2004 and 2003 is
$.0291 and $.1210, respectively. The weighted average remaining life of options
granted is 8.42 and 9.42 years at June 30, 2004 and 2003, respectively.

The fair value of these options was estimated at the date of grant using a
Black-Scholes option pricing model with the following weighted average
assumptions for 2004 and 2003: Risk free interest rate of 3.0%, a dividend yield
of zero and a volatility factor of .50, respectively.

                                       22

<PAGE>


                         RAVEN MOON ENTERTAINMENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             June 30, 2004 and 2003
                                   (unaudited)


Note 9 - STOCK OPTION PLAN (continued)


On September 16, 2003 the Board of Directors approved the voluntary option
incentive program to compensate employees, officers, directors and outside
consultants for services they provide to the Company. The Company has allocated
the following shares of common stock to this plan, and registered these shares
in an S-8 filings. The exercise price of the options is 50% of the 10 day moving
average closing bid price.

September 17, 2003                  10,000,000 Shares of common stock
November 28, 2003                   10,000,000 Shares of common stock
January 6, 2004                     10,000,000 Shares of common stock
January 16, 2004                    10,000,000 Shares of common stock
February 5, 2004                    10,000,000 Shares of common stock
February 26, 2004                   10,000,000 Shares of common stock
April 22, 2004                      20,000,000 Shares of common stock

On March 4, 2004 the Board of Directors authorized the issuance of 80,000,000
shares of common stock to the "Option Compensation Program" to compensate
consultants to the Company. These shares shall have a fixed exercise discount
rate of 50% of the average ten day closing bid price.


NOTE 10 - COMMON STOCK WARRANTS

                                                               Weighted Average
                                              Shares            Exercise Price
                                              ------            --------------

Outstanding at December 31, 2002              590,442               $1.2600

         Warrants expired                    (540,442)              $1.1550
                                             ---------

Outstanding at June 30, 2004
And December 31, 2003, respectively            50,000               $ .1500
                                               ======

The weighted-average remaining life of warrants granted were .25 and 1.25 years
at June 30, 2004 and 2003, respectively.

The fair value of these warrants was estimated at the date of grant using a
Black-Scholes option pricing model with the following weighted average
assumptions for 2004 and 2003: Risk free interest rate of 3.0%, a dividend yield
of zero and a volatility factor of .50, respectively.

                                       23

<PAGE>


                         RAVEN MOON ENTERTAINMENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             June 30, 2004 and 2003
                                   (unaudited)


NOTE 11 - PRIVATE PLACEMENT OFFERRING

The Company has plans to raise $5,000,000 in a private placement offering. The
proceeds of the private placement will be for working capital purposes. The
Company is offering units that consist of one share convertible Series B
Preferred Stock and a warrant to purchase one hundred shares of common stock at
a price of $10.00 per unit. The minimum purchase is $10,000. The conversion
right may be exercised at any time by the holder of the shares, but shall occur
automatically at the Company's discretion at any time after a registration
statement to register the shares of common stock underlying both the preferred
share and the warrant. Each preferred share shall convert to $10.00 in value of
common stock. The value of the common stock will be based upon the average
closing price of the Company's common stock for each of the ten consecutive
trading days prior to the dated of conversion, less a 20% discount. The
preferred shares have a preference over common stock in any liquidation of the
Company. The preferred shares are not entitled to any dividend or distribution
in preference to common stock. The warrant will permit the holder to purchase
100 shares at $.10 per share. There is no expiration date on the Warrants. Also,
the warrants will be subject to redemption at the Company's option for $.05 per
warrant provided the closing price exceeds $.20 per share for at least thirty
days ending on the third day prior to the mailing of the notice. Subsequent to
June 30, 2004 the Company has sold an additional $355,000 in the private
placement offerings, for a total of $795,000.

Note 12 - SUBSEQUENT EVENTS

At the August 12, 2004 Board of Directors meeting the Board approved the
following:

a)   A new consultant compensation plan for 90,000,000 shares of S-8 common
     stock for key consultants currently under contract and new consultants that
     may be hired in the future.

b)   Granted Joseph and Bernadette DiFrancesco, the officers of the Company,
     10,000,000 shares of common restricted non-diluting stock which should be
     calculated at approximately five (5%) of the number of outstanding shares
     at the time of delivery on September 1, 2004 and then each year on the
     first day of September for the next two years and any extension of their
     agreement.

c)   Granted 6,000,000 shares of stock of non-diluting stock (approximately one
     (1%) percent of the outstanding shares at the time of delivery to three
     board members for one-year of service.

d)   Extend the Company's Private Placement Plan until January 30, 2005 and
     attempt to raise $5,000,000 for production of up to 39 episodes of "Gina
     D's Kids Club."

e)   Increased the authorized shares to 600,000,000 common shares, pending
     shareholder approval.

                                       24

<PAGE>


                         RAVEN MOON ENTERTAINMENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             June 30, 2004 and 2003
                                   (unaudited)


Note 12 - SUBSEQUENT EVENTS (continued)

f)   To relinquish any influence Raven Moon Entertainment, Inc. may have over
     Clubhouse Videos, Inc., Raven Moon Entertainment, Inc. shall pay a dividend
     of Clubhouse Videos, Inc. shares (approximately 6% of the outstanding
     shares) currently being held by Raven Moon Entertainment, Inc. to Raven
     Moon Entertainment, Inc. sharesholders of record as of September 15, 2004,
     once Clubhouse Videos, Inc. begins trading.

The Board of Directors of Raven Animation, Inc. met on July 27, 2004 and
approved the following:

a)   Raven Animation, Inc. should authorize 600,000,000 shares of common stock.

b)   For every 10 shares of Raven Moon Entertainment, Inc. the shareholder of
     record owns on September 15, 2004 shall receive one share of Raven
     Animation, Inc.

c)   The officers and directors shall receive a one time grant of 90,000,000
     shares of common stock of Raven Animation, Inc.

d)   A pool of 60,000,000 shares of stock will be set aside for key animators
     and writers. These shares will be issued at the discretion of the CEO.

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<PAGE>


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

     Cautionary statement identifying important factors that could cause our
actual results to differ from those projected in forward looking statements.

     Pursuant to the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995, readers of this report are advised that this
document contains both statements of historical facts and forward looking
statements. Forward looking statements are subject to certain risks and
uncertainties, which could cause actual results to differ materially from those
indicated by the forward looking statements. Examples of forward looking
statements include, but are not limited to (i) projections of revenues, income
or loss, earnings per share, capital expenditures, dividends, capital structure
and other financial items, (ii) statements of our plans and objectives with
respect to business transactions and enhancement of shareholder value, (iii)
statements of future economic performance, and (iv) statements of assumptions
underlying other statements and statements about our business prospects.

     The following Management's Discussion and Analysis of Financial Condition
and Results of Operations should be read in conjunction with our financial
statements and the notes thereto appearing elsewhere in this report.

Overview

     In the past year, Raven Moon Entertainment has produced 13 half-hour
television program episodes of "Gina D's Kids Club" and a television special
called "Gina D's Cuddle Bug Christmas" in which 10 DVD, Video, Music CD and toy
products have been manufactured; "Gina D's Kids Club" Volume 1, ("Join The
Club"), "Gina D's Kids Club" Volume 2, ("Good News"), "Gina D's Kids Club"
Volume 3, ("Smile-A-bility"), the "Gina D's Kids Club" Three Episode DVD, the
"Gina D's Kids Club" Music CD Volume 1, the "Gina D's Kids Club" Music CD Volume
2, the "Young America" Limited Edition CD single, the "Sing A Long With Gina"
VHS, the "Sing A Long With Gina" DVD, and the "Cuddle Bug" plush toy. In
addition it has begun developing a "Mr. Bicycle Man" television series and
feature film with former Disney animators, completed a "Mr. Bicycle Man" Pubic
Service Announcement, produced a trailer for the "BoBo Blocks" television
series, and a trailer of the "Amazon Challenge - Search For The Amazon Queen"
television series and has started pre-production for 4 new episodes of Gina D's
Kids Club" and a "Gina D's Kids Club Special called "Journey To The Land Of
Dinosaurs". The company has also signed former CBS "Survivor All Star" Rob C.
and has been negotiating a talent contract with former CBS "Survivor All Star"
Rupert Boneham.

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<PAGE>


     Raven Moon has also established certain relationships with distributors
which have already generated orders from Christian bookstores throughout the
country and most major online retailers including Wal-Mart, Target, Books A
Million, Borders, Toys R Us, Babies R US, and Amazon. The company has reduced
its debt, however, the company will not be able to generate significant revenues
until the television programs air on television, are accepted by the viewers and
attract licensing offers from major distributors, manufacturers and retailers.

     The company has completed a total of 13 episodes of the "Gina D's Kids
Club" series which begin to air on television once a week in September 2004,
through the efforts of our syndicator Role Entertainment. In order to maximize
our airtime exposure to five days like programs such as "Sesame Street",
"Arthur" and "Barney" the company will have to produce an additional 26
half-hour episodes at an approximate cost of $5,200,000. As part of our business
plan, the completion of a total of 39 episodes so the programs can air five days
a week could create multiple revenue streams which includes worldwide licensing
and merchandising opportunities for the videos, CD's, and toys that have been
inspired by the show if the programs are well received by the viewers, the
licensees and the retailers. Parents told us that they wanted better programming
for their children, and we are committed to our goal of providing the very best
in family values children's entertainment.

                              Results of Operations

Revenues - The Company's consolidated revenues for the six months ended June 30,
2004 (2004 Quarters) decreased to $1,609 from $1,014,331 for the six months
ended June 30, 2003 (2003 Quarters). The decrease in revenue is due to lower
revenues from sale of toys and intellectual property.

Expenses - Increased to $5,195,662 for the 2004 Quarters as compared to
$1,213,286 for the 2003 Quarters. This increase is primary due to increase in
production costs and consulting fees.

 Net Loss - Increased to $5,224,388 or $0.0448 per share for the 2004 Quarters
 as compared to a net income of $1,084,621 or $0.0788 per share during the 2003
 Quarters. The net loss can be attributable to the decrease in sales and
 increased expenses.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated
with Exit or Disposal Activities." SFAS No. 146 supersedes Emerging Issues Task
Force Issue No. 94-3, "Liability Recognition for Certain Employee Termination
Benefits and Other Costs To Exit an Activity (Including Certain Costs Associated
with a Restructuring)" and requires that a liability for a cost associated with
an exit or disposal activity be recognized when the liability is incurred, as
opposed to when management is committed to an exit plan. SFAS No. 146 also
establishes that the liability should initially be measured and recorded at fair
value. SFAS No. 146 is effective for exit or disposal activities initiated after
December 31, 2002. The provisions of SFAS No. 146 are required to be applied
prospectively after the adoption date to newly initiated exit activities.

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<PAGE>


In November 2002, the FASB's Emerging Issues Task Force reached a consensus on
Issue No. 00-21, "Accounting for Revenue Arrangement with Multiple
Deliverables," which addresses circumstances involving the delivery or
performance of multiple products, services, and/or rights to use assets, and for
which performance may occur at different points in time or over different
periods of time. Issue No. 00-21 also addresses whether the different
revenue-generating activities, or deliverables, are sufficiently separable, and
there exists sufficient evidence of their fair values to separately account for
some or all of the deliverables. The issue applies to all contractual
arrangements under which a vendor will perform multiple revenue-generating
activities. Issue No. 00-21 is effective for all revenue arrangements entered
into in fiscal periods beginning after June 15, 2003, with early adoption
permitted. The Company will adopt this guidance prospectively for all revenue
arrangements entered into after December 29, 2002. The Company does not expect
Issue No. 00-21 to have a material impact on the financial statements.

In December 2002 the FASB issued SFAS No. 148, "Accounting for Stock-Based
Compensation -- Transition and Disclosure" that amends SFAS No. 123, "Accounting
for Stock-Based Compensation." The standard provides for (1) alternative methods
of transition for an entity that voluntarily changes to the fair-value method of
accounting for stock-based employee compensation; (2) requires more prominent
disclosure of the effects of an entity's accounting policy decisions with
respect to stock-based employee compensation on reported income; and (3) amends
APB Opinion No. 28, "Interim Financial Reporting," to require disclosure of
those effects in interim financial information. SFAS No. 148 is effective for
fiscal years ending after December 15, 2002, and for financial reports
containing condensed financial statements for interim periods beginning after
December 15, 2002. The Company will continue to account for employee stock
options using the fair value method in accordance with of SFAS No. 123 and 148.

ITEM 3. CONTROLS AND PROCEDURES

(a) Under the supervision and with the participation of our principal executive
officer and principal financial officer, we conducted an evaluation of the
design and operation of our disclosure controls and procedures, as such term is
defined under Rules 13a-14(c) and 15d-14(c) promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), within 90 days of the
filing date of this report. Based on that evaluation, our principal executive
officer and our principal financial officer concluded that the design and
operation of our disclosure controls and procedures were effective to ensure
that information required to be included in our Securities and Exchange
Commission reports is recorded, processed, summarized and reported within the
time periods specified in the Commission's rules and forms.

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<PAGE>


(b) In addition, there were no significant changes in our internal controls or
in other factors that could significantly affect these controls subsequent to
the Evaluation Date, including any corrective actions with regard to significant
deficiencies and material weaknesses.



                                    Part II.

Item 1.  Legal Proceedings



Item 2.  Changes in securities

None.

Item 3.  Defaults on Senior Securities

None.

Item 4.  Submission of Matters to Vote of Security Holders

None.

Item 5.  Other Information

None.

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

         (a)      Exhibits and Index of Exhibits

         31.      Rule 13a-14(a)/15d-14(a) Certifications pursuant to Section
                  302 of the Sarbanes-Oxley Act of 2002.

         32.      Section 1350 Certification pursuant to Section 906 of the
                  Sarbanes-Oxley Act of 2002.

         (b)      Reports on Form 8-K.

         No reports were filed on Form 8-K for the period ended June 30, 2004.

                                       29

<PAGE>


                                    SIGNATURE


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

RAVEN MOON INTERNATIONAL, INC.
(Registrant)


By:  /s/  Joseph DiFrancesco                             Date:  August 19, 2004
   ----------------------------------------
          Joseph DiFrancesco, President

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