SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                 ---------------

                                    FORM 10-Q


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

                FOR THE QUARTERLY PERIOD ENDED September 30, 2002

                                       OR

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


                        COMMISSION FILE NUMBER 000-26793


                           BIGSTAR ENTERTAINMENT, INC.
             ------------------------------------------------------
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)


           Delaware                                             13-339-5258
-------------------------------                           ----------------------
(State or other jurisdiction of                                (IRS Employer
incorporation or organization)                            Identification Number)


                          19 Fulton Street - 4th Floor
                            New York, New York 10038
               ---------------------------------------------------
               (Address of Principal Executive Offices) (Zip Code)


                                 (212) 571-9276
              ----------------------------------------------------
              (Registrant's telephone number, including area code)


         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 the number of shares outstanding of each of the issuer's
classes of common stock, $0.001 par value, as of the latest practicable date:

             7,797,693 shares of common stock as of November 1, 2002
<PAGE>

                           BIGSTAR ENTERTAINMENT, INC.

                                    FORM 10-Q

                    FOR THE QUARTER ENDED September 30, 2002



                                      INDEX

                                     PART I.
                              FINANCIAL INFORMATION

                                                                        PAGE NO.
                                                                        --------
ITEM 1.  FINANCIAL STATEMENTS

         Consolidated Balance Sheets at September 30, 2002 (unaudited)
         and December 31, 2001..........................................    3

         Consolidated Statements of Operations for the three and
         nine-month periods ended September 30, 2002 and September 30,
         2001 (unaudited)...............................................    4

         Consolidated Statements of Cash Flows for the three and
         nine-month periods ended September 30, 2002 and September 30,
         2001 (unaudited)...............................................    5

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

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
         AND RESULTS OF OPERATIONS......................................   10

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.....   13

ITEM 4.  CONTROLS AND PROCEDURES........................................   13


                                    PART II.
                                OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS..............................................   14

ITEM 5.  EXHIBITS AND REPORTS ON FORM 8-K...............................   14

SIGNATURES..............................................................   15


                                        2
<PAGE>

                                     PART I.
                              FINANCIAL INFORMATION


ITEM 1.  FINANCIAL STATEMENTS.

                                   BIGSTAR ENTERTAINMENT
                                CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                               September 30,   December 31,
                                                                   2002            2001
                                                                (unaudited)
                                                               ------------    ------------
<S>                                                            <C>             <C>
ASSETS:
Cash and cash equivalents                                      $    344,392    $  1,628,354
Restricted cash                                                     630,600         180,600
Accounts receivable, net of allowance                                    --          27,067
Prepaids and other current assets                                    56,667          65,427
                                                               ------------    ------------

Total current assets                                              1,031,659       1,901,448
                                                               ------------    ------------

Assets held for sale                                                    -0-          30,000
Other assets                                                         15,337          15,427
                                                               ------------    ------------

Total assets                                                   $  1,046,996    $  1,946,875
                                                               ============    ============

LIABILITIES:
Accounts payable                                               $    126,452    $    213,852
Accrued expenses                                                    832,531         703,788
Other current liabilities                                            65,339         130,674
                                                               ------------    ------------

Total current liabilities                                         1,024,322       1,048,314
                                                               ------------    ------------

MINORITY INTEREST                                              $    178,993    $    178,993
                                                               ------------    ------------

STOCKHOLDERS' EQUITY (DEFICIENCY):

Common Stock, $.001 par value; 40,000,000 shares authorized;
  10,187,445 issued and outstanding at September 30, 2002
  and December 31, 2001, respectively                                10,187          10,187
Treasury Stock, 2,389,752 at September 30, 2002 and
  December 31, 2001, respectively                                   (97,067)        (97,067)
Additional paid-in capital                                       47,919,819      47,919,819
Accumulated deficit                                             (47,989,258)    (47,113,371)
                                                               ------------    ------------

Total stockholders' equity (deficiency)                            (156,319)        719,568
                                                               ------------    ------------

Total liabilities and stockholders' equity (deficiency)        $  1,046,996    $  1,946,875
                                                               ============    ============
</TABLE>


              The accompanying notes are an integral part of these
                         condensed financial statements.

                                        3
<PAGE>

                                          BIGSTAR ENTERTAINMENT, INC.
                                     CONSOLIDATED STATEMENTS OF OPERATIONS
                                                  (Unaudited)


<TABLE>
<CAPTION>
                                                    Nine Months    Nine Months   Three Months   Three Months
                                                       Ended          Ended          Ended          Ended
                                                   September 30,  September 30,  September 30,  September 30,
                                                        2002           2001           2002           2001
                                                    -----------    -----------    -----------    -----------

<S>                                                 <C>            <C>            <C>            <C>
NET SALES                                           $       -0-    $ 1,506,415    $       -0-    $    30,210
COST OF REVENUES                                            -0-      1,113,533            -0-            -0-
                                                    -----------    -----------    -----------    -----------

     Gross profit                                           -0-        392,882            -0-         30,210

OPERATING EXPENSES (INCOME)
     Sales and marketing                                    -0-        (76,462)           -0-        (23,120)
     General and administrative                         877,703      2,475,911        223,079        920,665
     Website and software development                   (13,307)     1,277,720            -0-        278,499
     Writedown of assets held for sale                   30,000            -0-         30,000            -0-
                                                    -----------    -----------    -----------    -----------

     Total operating expenses                           894,396      3,677,169        253,079      1,176,044
                                                    -----------    -----------    -----------    -----------

     Loss from operations                              (894,396)    (3,284,287)      (253,079)    (1,145,834)

INTEREST INCOME, net                                     18,509         99,935          2,248         21,998
                                                    -----------    -----------    -----------    -----------

     Net loss                                       $  (875,887)   $(3,184,352)   $  (250,831)   $(1,123,836)
                                                    ===========    ===========    ===========    ===========

PER SHARE INFORMATION:

     Net loss per share -
          Basic and diluted                         $     (0.11)   $     (0.39)         (0.03)         (0.14)
                                                    ===========    ===========    ===========    ===========

     Weighted average common shares outstanding -
          Basic and diluted                           7,797,693      8,186,361      7,797,693      7,956,115
                                                    ===========    ===========    ===========    ===========
</TABLE>


         The accompanying notes are an integral part of these condensed
                        consolidated financial statements

                                        4
<PAGE>

BIGSTAR ENTERTAINMENT, INC.

                                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                        Nine Months    Nine Months    Three Months   Three Months
                                                           Ended          Ended          Ended          Ended
                                                       September 30,  September 30,  September 30,  September 30,
                                                            2002           2001           2002           2001
                                                        -----------    -----------    -----------    -----------
<S>                                                     <C>            <C>            <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net loss                                           $  (875,887)   $(3,184,352)   $  (250,831)   $(1,123,836)
       Depreciation and amortization                            -0-        624,556            -0-        202,247
       Writedown of assets held for sale                     30,000            -0-         30,000            -0-
       Allowance for doubtful accounts                       (5,000)           -0-            -0-            -0-
       Changes in assets and liabilities -
         Accounts receivable                                 32,067        252,857            -0-        (14,757)
         Prepaids and other current assets                    8,762        292,194         19,999         51,730
         Other non current assets                                90        105,789            -0-         25,639
         Accounts payable and accrued expenses               41,341     (1,395,978)            29         53,236
         Other current liabilities                          (65,335)       130,674        (49,001)           -0-
                                                        -----------    -----------    -----------    -----------
     Net cash used in operating activities                 (833,962)    (3,174,260)      (249,804)      (805,741)
                                                        -----------    -----------    -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Sale and return of equipment                               -0-         73,845            -0-          3,625
                                                        -----------    -----------    -----------    -----------
         Net cash provided by investing activities              -0-         73,845            -0-          3,625
                                                        -----------    -----------    -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
     Purchase of treasury stock                                 -0-        (57,142)           -0-            -0-
                                                        -----------    -----------    -----------    -----------
     Net cash used in financing activities                      -0-        (57,142)           -0-            -0-
                                                        -----------    -----------    -----------    -----------

     Net decrease in cash and cash equivalents             (833,962)    (3,157,557)      (249,804)      (802,116)
     Reclassification of cash and cash equivalents to
         restricted cash due to legal matter               (450,000)           -0-            -0-            -0-

CASH AND CASH EQUIVALENTS, beginning of period            1,628,354      5,373,100        594,196      3,017,659
                                                        -----------    -----------    -----------    -----------

CASH AND CASH EQUIVALENTS, end of period                $   344,392    $ 2,215,543    $   344,392    $ 2,215,543
                                                        ===========    ===========    ===========    ===========
</TABLE>


        The accompanying notes are an integral part of these consolidated
                         condensed financial statements.

                                        5
<PAGE>

                           BIGSTAR ENTERTAINMENT, INC.

                     NOTES TO CONDENSED FINANCIAL STATEMENTS


NOTE 1 - OVERVIEW AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Overview

         Bigstar Entertainment, Inc. ("Bigstar" or the "Company") had been an
online retailer of filmed entertainment products and a provider of entertainment
industry information. Through its website, Bigstar.com, Bigstar had been selling
videos and digital video discs or DVDs, including feature films, children's
movies, and educational, health and fitness, and instructional videos, and
provided information on these products. In addition to selling filmed
entertainment, Bigstar.com featured biographies, movie stills and star
interviews. Bigstar.com also hosted Bigstar Broadband Theater which offered
visitors to our website the ability to stream and view on their computer movie
trailers and feature films. As disclosed below, as of December 31, 2001, the
Company has ceased operating its website.

         In December 2000, Bigstar sold Advaya, its direct marketing division.
The Company and its financial advisors also decided that it was necessary to
restructure Bigstar's current e-commerce platform. As of July 1, 2001, the
Company entered into an agreement with a competitor whereby the Company was
compensated for referring customers to the competitor's website. As a result of
this agreement, the Company ceased operating its e-tailing business and had
completely outsourced this function. This agreement terminated on December 31,
2001. Terms to renew the agreement were not favorable to the Company and at that
time, the Company discontinued referring customers to the competitors website.
This effectively caused the discontinuance of the online retail business.

         The Company also began to explore other business opportunities and
consider the disposition of its website and take other steps to conserve assets.
On September 17, 2001, the Company announced that it had signed a letter of
intent to acquire 100% of the outstanding shares of Athlete.com, Inc., a
privately-held youth sports information and instruction network. However, the
parties were unable to come to a definitive agreement and on February 8, 2002,
the Board of Directors terminated the letter of intent with Athlete.com, Inc.
and all further negotiations with respect to the previously announced merger
transaction between the two parties.

         Bigstar is continuing to pursue other opportunities. Currently, the
Company is pursuing acquisitions of other entertainment related companies. The
Company is in negotiations with various funding sources interested in
collaborating in this effort. The Company is also developing television and film
properties for distribution worldwide. The Company plans to use funds from
various September 11th related funding organizations, outside capital, and sales
of the television and film properties in various worldwide media markets prior
to completion of principal photography in order to fund these ventures. Locating
and producing in lower Manhattan is vital for qualifying for funding from
governmental agencies seeking to rebuild this area. The Company's management
will also consider recommending to the Board of Directors alternative plans
which may include, but not be limited to, redeployment of the remaining cash
assets into a new business venture, liquidation of all corporate assets and
distribution of remaining proceeds to its stockholders or some other alternative
to be determined. There can be no assurance that Bigstar will be successful in
any of these activities or be able to continue in existence.

                                        6
<PAGE>

Basis of Presentation

         The accompanying financial statements have been prepared by the Company
pursuant to the rules and regulations of the Securities and Exchange Commission.
The September 30, 2002 unaudited (consolidated) financial statements have been
prepared on the same basis as the December 31, 2001 audited financial statements
and, in the opinion of management, include all adjustments, consisting only of
normal recurring adjustments, necessary to state fairly the financial
information included, in accordance with generally accepted accounting
principles. Certain information and footnote disclosures normally included in
consolidated financial statements prepared in accordance with generally accepted
accounting principles have been omitted pursuant to such SEC rules and
regulations. The results of operations for the interim period ended September
30, 2002 are not necessarily indicative of the results which may be reported for
any other interim period or for the year ending December 31, 2002.

         Certain amounts in the prior period have been reclassified to conform
to the current period's presentation.

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.

Revenue Recognition

         As of December 31, 2001, the Company has ceased operating its website.
As a result, there were no revenues for the nine months ended September 30,
2002.

Cost of Revenues

         As of December 31, 2001, the Company has ceased operating its website.
As a result, there were no revenues or cost of revenues for the nine months
ended September 30, 2002.

Net Loss Per Share

         The Company accounts for net loss per share in accordance with the
provisions of SFAS No. 128, "Earnings Per Share." In accordance with SFAS No.
128, basic earnings per share is computed using the weighted average number or
common and dilutive common equivalent shares outstanding during the period.
Common equivalent shares, consist of the incremental common shares issuable upon
the exercise of stock options, and warrants (using the Treasury Stock Method);
common equivalent shares are excluded from the calculation if their effect is
anti-dilutive. Diluted loss per share for the three and nine months ended
September 30, 2002, and September 30, 2001 does not include the impact of
1,245,761 and 1,496,037 common stock options and warrants then outstanding,
respectively, as the effect of their inclusion would be anti-dilutive.

Comprehensive Income

         The Company adheres to the provisions of SFAS No. 130, "Reporting
Comprehensive Income," which establishes standards for reporting and displaying
comprehensive income and its components in a full set of general purpose
financial statements. The Company has no elements of comprehensive income in
2002 or 2001. Accordingly, the Company's comprehensive net loss is equal to its
net loss for the three and nine months ended September 30, 2002 and the three
and nine months ended September 30, 2001.

                                        7
<PAGE>

Recent Accounting Pronouncements

         On July 20, 2001, the Financial Accounting Standards Board ("FASB")
issued, Statement of Financial Accounting Standards SFAS 141, "Business
Combinations," and SFAS 142, "Goodwill and Intangible Assets." SFAS 141 is
effective for all business combinations completed after June 30, 2001. SFAS 142
is effective for fiscal years beginning after December 15, 2001; however,
certain provisions of SFAS 142 apply to goodwill and other intangible assets
acquired between July 1, 2001 and the effective date of SFAS 142. Major
provisions of these Statements and their effective dates for Bigstar are as
follows:

         o    All business combinations initiated after June 30, 2001 must use
              the purchase method of accounting. The pooling of interest method
              of accounting is prohibited except for transactions initiated
              before July 1, 2001.
         o    Intangible assets acquired in a business combination must be
              recorded separately from goodwill if they arise from contractual
              or other legal rights or are separable from the acquired entity
              and can be sold, transferred, licensed, rented or exchanged either
              individually or as part of a related contract, asset or liability.
         o    Goodwill, as well as intangible assets with indefinite lives,
              acquired after June 30, 2001, will not be amortized. Effective
              January 1, 2002, all previously recognized goodwill and
              intangible assets with indefinite lives will no longer be subject
              to amortization.
         o    Effective January 1, 2002, goodwill and intangible assets with
              indefinite lives will be tested for impairment annually and
              whenever there is an impairment indicator.
         o    All acquired goodwill must be assigned to reporting units for
              purposes of impairment testing and segment reporting.

In August 2001, the FASB issued Statement of Financial Accounting Standards No.
144 ("SFAS No. 144"), "Accounting for the Impairment or Disposal of Long-Lived
Assets." This statement is effective for the fiscal years beginning after
December 15, 2001. This Statement supersedes Statement of Financial Accounting
Standards No. 121 ("SFAS No. 121"), Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed Of," while retaining many of the
requirements of such statement. Management's assessment is that these Statements
do not have a material impact on Bigstar's financial position or results of
operations.

         In April 2002, the Financial Accounting Standard's Board ("FASB")
adopted Statement of Financial Accounting Standards 145 Rescission of FASB
Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical
Corrections ("SFAS 145"). This statement rescinds FASB Statement No. 4,
Reporting Gains and Losses from Extinguishments of Debt, and an amendment of
that Statement, FASB Statement No. 64, Extinguishments of Debt Made to Satisfy
Sinking-Fund Requirements. This statement also rescinds FASB Statement No. 44,
Accounting for Intangible Assets of Motor Carriers. This Statement amends FASB
Statement No. 13, Accounting for Leases, to eliminate an inconsistency between
the required accounting for sale-leaseback transactions and the required
accounting for certain lease modifications that have economic effects that are
similar to sale-leaseback transactions. This Statement also amends other
existing authoritative pronouncements to make various technical corrections,
clarify meanings, or describe their applicability under changed conditions.
Statement No. 145 is effective for fiscal years beginning after May 15, 2002.
The Company believes that this statement will not have a significant impact on
their results of operations or financial position upon adoption.

         In July 2002, the Financial Accounting Standards Board issued Statement
No. 146 "Accounting for Costs Associated with Exit or Disposal Activities ("SFAS
146"). This Statement addresses financial accounting and reporting for costs

                                        8
<PAGE>

associated with exit or disposal activities and nullifies Emerging Issues Task
Force (EITF) Issue No. 94-3 "Liability Recognition for Certain Employee
Termination Benefits and Other Costs to Exit and Activity (including Certain
Costs Incurred in a Restructuring)." The principal difference between this
Statement and Issue 94-3 relates to its requirements for recognition of a
liability for a cost associated with an exit or disposal activity. This
Statement requires that a liability for a cost associated with an exit or
disposal activity may be recognized when the liability is incurred. Under Issue
94-3, a liability for an exit cost as defined in Issue 94-3 was recognized at
the date of an entity's commitment to an exit plan. The provisions of this
Statement are effective for exit or disposal activities that are initiated after
December 31, 2002. The Company believes that this new standard will not have a
material effect on the results of operations or financial condition.


NOTE 2 - STOCKHOLDER'S EQUITY

Repurchase of Shares

         In December 2000, the Company commenced a stock repurchase program. The
Company's board of directors originally authorized the repurchase of up to
2,000,000 shares of the Company's common stock. Prior to December 31, 2000, the
Company repurchased 802,758 shares of common stock. Subsequent to December 31,
2000, the program was expanded whereby the Company was authorized to repurchase
up to a total of 3,000,000 shares. During the year ended December 31, 2001, the
Company repurchased an additional 1,586,994 shares. These purchases are
reflected in treasury shares.


NOTE 3 - Liquidity

         The accompanying financial statements have been prepared in conformity
with generally accepted accounting principles, which contemplate continuation of
the Company as a going concern. We have an accumulated deficit of approximately
$47,989,000 as of September 30, 2002. Web site operations ceased December 31,
2001. The Company has incurred a loss from operations in all periods since
inception. The Company has funded operations to date primarily through the sale
of common stock, however, the Company has been unsuccessful in raising
additional funding. The Company may seek additional funding through public or
private financing or other arrangements to pursue new business opportunities.
Adequate funds may not be available when needed or may not be available on terms
acceptable to the Company. If additional funds are raised by issuing equity
securities, dilution to existing stockholders will result. If funding is
insufficient at any time in the future, the Company may be unable to take
advantage of business opportunities which could have a material adverse effect
on its business and financial condition. These matters raise substantial doubt
about the Company's ability to continue as a going concern. No adjustments have
been made to the financial statements to reflect this.

         As noted in "Overview," Bigstar may seek to redeploy its remaining cash
assets into a new business, pursue other strategic alternatives or liquidate.
Currently, the Company is pursuing acquisitions of other entertainment related
companies. The Company is in negotiations with various funding sources
interested in collaborating in this effort. The Company is also developing
television and film properties for distribution worldwide. The Company plans to
use funds from various September 11th related funding organizations, outside
capital, and sales of the television and film properties in various worldwide
media markets prior to completion of principal photography in order to fund
these ventures. Locating and producing in lower Manhattan is vital for
qualifying for funding from governmental agencies seeking to rebuild this area.
The Company's management will consider recommending to the Board of Directors
alternative plans which may include, but not be limited to, redeployment of the
remaining cash assets into a new business venture, liquidation of all corporate

                                        9
<PAGE>

assets and distribution of remaining proceeds to its stockholders or some other
alternative to be determined. There can be no assurance that Bigstar will be
successful in these activities or be able to continue in existence.

         As a result of the tragic events of September 11, 2001, the Company
applied for and received a grant of $150,000 from the World Trade Center
Recovery Grant Program. Under the terms of the grant program, the Empire State
Development Corporation may require the Company to repay some or all of the
grant funds if the Company does not resume operating its business in New York
City within one year of the receipt of the grant funds or if at any time within
a three year period commencing on the date of its application, the Company has
relocated a substantial portion of its business operations from New York City.
Since the future of the Company is uncertain and the Company may be required to
repay the grant, the $150,000 grant received is shown as a liability on the
balance sheet and has not been recorded to income.


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS.

         Except for historical information, the statements in this Form 10-Q
report (including, without limitation, the discussion under the heading "Results
of Operations") contain forward-looking statements that involve risks and
uncertainties. The Company's actual results could differ materially from those
discussed herein. Factors that could cause or contribute to such differences
include, but are not limited to, those discussed below. The following discussion
should be read in conjunction with the Company's financial statements and the
related notes to those statements and the other financial information appearing
elsewhere in this Form 10-Q. Readers are also urged to carefully review and
consider the various disclosures made by us which attempt to advise interested
parties of the factors which affect our business, including without limitation
the disclosures made under the caption "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and the audited financial
statements and related footnotes included herein and in the Company's Form 10-K
for the year ended December 31, 2001.

OVERVIEW

         Bigstar had been an online retailer of filmed entertainment products
and a provider of entertainment industry information. Through its website,
Bigstar.com, Bigstar had been selling videos and digital video discs or DVDs,
including feature films, children's movies, and educational, health and fitness,
and instructional videos, and provided information on these products. In
addition to selling filmed entertainment, Bigstar.com featured biographies,
movie stills and star interviews. Bigstar.com also hosted Bigstar Broadband
Theater which offered visitors to our website the ability to stream and view on
their computer movie trailers and feature films. As disclosed below, as of
December 31, 2001, the Company has ceased all operations through its website.

         In December 2000, Bigstar sold Advaya, its direct marketing division.
The Company and its financial advisors also decided that it was necessary to
restructure Bigstar's current e-commerce platform. As of July 1, 2001, the
Company entered into an agreement with a competitor whereby the Company was
compensated for referring customers to the competitor's website. As a result of
this agreement, the Company ceased operating its e-tailing business and had
completely outsourced this function. This agreement terminated on December 31,
2001. As the terms to renew the agreement were not favorable to the Company and

                                       10
<PAGE>

at that time, the Company discontinued referring customers to the competitors
website. This effectively caused the discontinuance of the online retail
business.

         The Company also began to explore other business opportunities and
consider the disposition of its website and take other steps to conserve assets.
On September 17, 2001, the Company announced that it had signed a letter of
intent to acquire 100% of the outstanding shares of Athlete.com, Inc., a
privately-held youth sports information and instruction network. The parties,
however, were unable to enter into a definitive agreement and on February 8,
2002, the Board of Directors terminated the letter of intent with Athlete.com,
Inc. and all further negotiations with respect to the previously announced
merger transaction between the two parties.

         In October 2002, Bigstar purchased less than one percent of the shares
of Chorion Plc for approximately $150,000. Chorion Plc is a publically held Plc
in the United Kingdom which holds the underlying worldwide copywrights to
several literary works, including the Agatha Christie works.

         Bigstar is continuing to pursue other opportunities. The Company's
management will consider recommending to the Board of Directors alternative
plans which may include, but not be limited to, redeployment of the remaining
cash assets into a new business venture, liquidation of all corporate assets and
distribution of remaining proceeds to our stockholders or some other alternative
to be determined. There can be no assurance that Bigstar will be successful in
this regard or be able to continue in existence.


RESULTS OF OPERATIONS -- The three and nine-month periods ended September 30,
2002 and September 30, 2001.

         NET SALES. As of December 31, 2001, the Company has ceased all
operations through its website. As a result, there were no revenues for the
three and nine months ended September 30, 2002. Comparison to prior year results
would not be meaningful

         COST OF REVENUES. As of December 31, 2001, the Company has ceased all
operations through its website. As a result, there were no revenues or cost of
revenues for the three and nine months ended September 30, 2002. Comparison to
prior year results would not be meaningful.

         SALES AND MARKETING EXPENSES. As of December 31, 2001, the Company has
ceased all operations through its website. As a result, there were no sales and
marketing expenses incurred for the three and nine months ended September 30,
2002. Comparison to prior year results would not be meaningful.

         GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative
expenses were approximately $223,000 and $873,000 for the three and nine months
ended September 30, 2002 compared to $921,000 and $2,476,000 for the three and
nine months ended September 30, 2001. General and administrative expenses
include payroll and related expenses for executive, accounting and
administrative personnel, which were approximately $110,000 and $417,000,
respectively, for the three and nine months ended September 30, 2002 compared to
$263,000 and $1,255,000, respectively, for the three and nine months ended
September 30, 2001. The decrease in these costs is attributable to the decrease
in executive personnel costs and the cost of terminating personnel and lower
administrative and accounting personnel costs. General and administrative
expenses also include professional and outsourced administrative function fees,
which were approximately $43,000 and $245,000 respectively, for the three and
nine months ended September 30, 2002 compared to $133,000 and $237,000
respectively, for the three and nine month periods ending September 30, 2001.
The costs of facilities also decreased to approximately $23,000 and $80,000,

                                       11
<PAGE>

respectively for the three and nine months ending September 30, 2002 from
$34,000 and $172,000, respectively, for the three and nine months ending
September 30, 2001 reflecting the decrease in office space rented and related
supply costs due to reduction in personnel.

         WEBSITE AND OPERATION DEVELOPMENT EXPENSES. Website and operation
development expenses were credits of approximately $-0- and $13,000,
respectively, for the three and nine months ended September 30, 2002, compared
to charges of approximately $278,000 and $1,278,000, respectively, for the three
and nine months ended September 30, 2001. Website and administrative expenses
consist of systems and telecommunications services, personnel costs and related
expenses for the design, development and management of our websites. Personnel
costs and related expenses for the design, development and management of our
websites totaled approximately $-0- and $12,000, respectively, for the three and
nine months ending September 30, 2002, and $31,000 and $252,000 for the three
and nine months ending September 30, 2001 reflecting the decrease in the number
of personnel and related expenses. The costs of systems and telecommunications
services were credits of approximately $-0- and $32,000, respectively, for the
three and nine month periods ending September 30, 2002 as a result of
settlements with vendors to pay reduced amounts resulting in reversal of
expenses previously recorded and charges of approximately $234,000 and $965,000,
respectively for the three and nine month periods ending September 30, 2001
reflecting the cessation of site activity and reductions of expenses previously
recorded.

         NET LOSS. Bigstar's net loss was $241,000 and $866,000, respectively
for the three and nine month periods ended September 30, 2002 as compared to
$1,124,000 and $3,184,000, respectively for the three and nine month periods
ending September 30, 2001. Due to the uncertainty regarding our future
profitability, the future tax benefits of our losses have been fully reserved
for and therefore, no benefit for the net operating loss has been recorded.
Under Section 382 of the Internal Revenue Code, this operating loss may be
limited due to ownership changes.

LIQUIDITY AND CAPITAL RESOURCES

         The accompanying financial statements have been prepared in conformity
with generally accepted accounting principles, which contemplate continuation of
the Company as a going concern. We have an accumulated deficit of approximately
$47,989,000 as of September 30, 2002. Web site operations ceased December 31,
2001 and the Company has no operating business. The Company has incurred a loss
from operations in all periods since inception. The Company has funded
operations to date primarily through the sale of common stock, however, the
Company has been unsuccessful in raising additional funding. The Company may
seek additional funding through public or private financing or other
arrangements to pursue new business opportunities. Adequate funds may not be
available when needed or may not be available on terms acceptable to the
Company. If additional funds are raised by issuing equity securities, dilution
to existing stockholders will result. If funding is insufficient at any time in
the future, the Company may be unable to take advantage of business
opportunities which could have a material adverse effect on its business and
financial condition. These matters raise substantial doubt about the Company's
ability to continue as a going concern. No adjustments have been made to the
financial statements to reflect this.

         As noted in "Overview," Bigstar is seeking to redeploy its remaining
cash assets into a new business, pursue other strategic alternatives or
liquidate. The Company's management will consider recommending to the Board of
Directors alternative plans which may include, but not be limited to,
redeployment of the remaining cash assets into a new business venture,
liquidation of all corporate assets and distribution of remaining proceeds to
its stockholders or some other alternative to be determined. There can be no
assurance that Bigstar will be successful in this regard or be able to continue
in existence.

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<PAGE>

         As a result of the tragic events of September 11, 2001, the Company
applied for and received a grant of $150,000 from the World Trade Center
Recovery Grant Program. Under the terms of the grant program, the Empire State
Development Corporation may require the Company to repay some or all of the
grant funds if the Company does not resume operating its business in New York
City within one year of the receipt of the grant funds or if at any time within
a three year period commencing on the date of its application, the Company has
relocated a substantial portion of its business operations from New York City.
Since the future of the Company is uncertain and the Company may be required to
repay the grant, the $150,000 grant received is shown as a liability on the
balance sheet and has not been recorded to income.

         Net cash used in operating activities for the three and nine months
ended September 30, 2002 and 2001 of approximately $250,000 and $834,000
respectively was primarily due to our net loss of approximately $251,000 and
$876,000 for the three and nine month periods ending September 30, 2002.

         During the second quarter of this year, the Company reclassified
$450,000 of cash and cash equivalents to restricted cash in response to the
restraining order - See Part II, Item 1 - Legal Proceedings.

         As of September 30, 2002, the Company had working capital of
approximately $7,000 compared to $853,000 at December 31, 2001. The decrease in
working capital is primarily attributable to the reduction in cash and cash
equivalents and short-term investments required to fund our operating losses. At
September 30, 2002 compared to December 31, 2000, the increase in accounts
payable and accrued expenses resulted from the recording of the World Trade
Center Grant of $150,000 offset by the reductions in accounts payables and
accrued expenses previously recorded. The decrease in accounts receivable was
due to the collection of outstanding advertising receivables.

         At September 30, 2002, our principal commitment consisted of
obligations under non-cancellable operating leases for real estate and an
employment agreement with our Chairman and Chief Executive Officer. The minimum
amounts payable under non-cancelable agreements was approximately $132,000.

         We have no material commitments for capital expenditures and do not
anticipate any significant future purchases during the next 12 months.


ITEM 3.  QUALITATIVE AND QUANTITAVIVE DISCLOSURES ABOUT MARKET RISK

         Not Applicable.


ITEM 4.  CONTROLS AND PROCEDURES

         (a)      An evaluation was performed under the supervision and with the
participation of BigStar's management of the effectiveness of the design and
operation of BigStar's disclosure controls and procedures within 90 days before
the filing date of this quarterly report. Based on that evaluation, BigStar's
management, concluded that BigStar's disclosure controls and procedures were
effective.

         (b)      Since the date of the evaluation, there have been no
significant changes in BigStar's internal controls or in other factors that
could significantly affect internal controls subsequent to the evaluation.

                                       13
<PAGE>

                                     PART II

                                OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS

         On June 29, 2001, First Equity Capital Securities, Inc. filed a
complaint in the Supreme Court of the State of New York, County of New York (the
"Court"), alleging unpaid finders fees relating to the Company's completion of
its Initial Public Offering in 1999 and seeking damages in excess of $450,000.
The Company believes the lawsuit is without merit and is vigorously defending
such action. In July 2002, the Court granted to the plaintiff a temporary
restraining order, which provides that Bigstar is restrained from disposing of,
transferring, pledging, assigning or otherwise liquidating its assets to the
extent of $450,000. Bigstar must keep that amount available to satisfy a
judgement, until the restraining order is vacated or modified.


ITEM 5.  EXHIBITS AND REPORTS ON FORM 8-K.

(a)      List of Exhibits:

         99.1 -   Certification by David Friedensohn, Chief Executive Officer
                  of the Company, pursuant to 18 U.S.C. Section 1350, as adopted
                  pursuant to Section 906 of the Sarbanes-Oxley Act of 2002..

(b)      Reporting on Form 8-K

         None.


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<PAGE>

                                   SIGNATURES

         Pursuant to the requirements 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.

                                  BIGSTAR ENTERTAINMENT, INC.


                                  By: /s/ DAVID FRIEDENSOHN
                                      ------------------------------------------
Dated: November 18, 2002              David Friedensohn, Chief Executive Officer
                                      (Principal Executive, Accounting and
                                      Financial Officer)


                                       15
<PAGE>

                                  CERTIFICATION
                                  -------------


David Friedensohn, certifies that:

         I have reviewed this quarterly report on Form 10-Q of BigStar
Entertainment Inc.;

         Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this
quarterly report;

         Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

         I am responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the
registrant and have:

         a)       designed such disclosure controls and procedures to ensure
that material information relating to the registrant, including its consolidated
subsidiaries, is made known to me by others within those entities, particularly
during the period in which this quarterly report is being prepared;

         b)       evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and

         c)       presented in this quarterly report my conclusion about the
effectiveness of the disclosure controls and procedures based on my evaluation
as of the Evaluation Date;

         I have disclosed, based on my most recent evaluation, to the
registrant's auditors and the audit committee of registrant's board of
directors:

         a)       all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and

         b)       any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrant's internal
controls; and

         I have indicated in this quarterly report whether or not there were
significant changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date of my most recent
evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.



         November 18, 2002             /s/ DAVID FRIEDENSOHN
                                       -----------------------------------------
                                       David Friedensohn
                                       Chief Executive Officer


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