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 June 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 August 1, 2002

<PAGE>

                           BIGSTAR ENTERTAINMENT, INC.

                                    FORM 10-Q

                       FOR THE QUARTER ENDED June 30, 2002


                                      INDEX

                                     PART I.
                              FINANCIAL INFORMATION
<TABLE>
<CAPTION>

                                                                                               PAGE NO.
ITEM 1.  FINANCIAL STATEMENTS
<S>                                                                                                <C>
Consolidated Balance Sheets at June 30, 2002 (unaudited) and December 31, 2001..................   3

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

Consolidated Statements of Cash Flows for the three and six-month periods ended
June 30, 2002 and June 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
</TABLE>


                                        2
<PAGE>

                                     PART I.
                              FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS.

                              BIGSTAR ENTERTAINMENT
                           CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>

                                                              June 30, 2002    December 31,
                                                               (unaudited)         2001
                                                               ------------    ------------
<S>                                                            <C>             <C>
ASSETS:
Cash and cash equivalents                                      $    594,196    $  1,628,354
Restricted cash                                                     630,600         180,600
Accounts receivable, net of allowance                                    --          27,067
Prepaids and other current assets                                    76,666          65,427
                                                               ------------    ------------

Total current assets                                              1,301,462       1,901,448
                                                               ------------    ------------

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

Total assets                                                   $  1,346,799    $  1,946,875
                                                               ============    ============

LIABILITIES:
Accounts payable                                               $    126,423    $    213,852
Accrued expenses                                                    832,531         703,788
Other current liabilities                                           114,340         130,674
                                                               ------------    ------------

Total current liabilities                                         1,073,294       1,048,314
                                                               ------------    ------------

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

STOCKHOLDERS' EQUITY:

Common Stock, $.001 par value; 40,000,000 shares authorized;
  10,187,445 issued and outstanding at June 30, 2002
  and December 31, 2001, respectively                                10,187          10,187
Treasury Stock, 2,389,752 at June 30, 2002 and
  December 31, 2001, respectively                                   (97,067)        (97,067)
Additional paid-in capital                                       47,919,819      47,919,819
Accumulated deficit                                             (47,738,427)    (47,113,371)
                                                               ------------    ------------

Total stockholders' equity                                           94,512         719,568
                                                               ------------    ------------

Total liabilities and stockholders' equity                     $  1,346,799    $  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>

                                                         Six Months       Six Months      Three Months     Three Months
                                                           Ended            Ended            Ended            Ended
                                                        June 30, 2002    June 30, 2001    June 30, 2002    June 30, 2001
                                                        -------------    -------------    -------------    -------------
<S>                                                     <C>              <C>              <C>              <C>
NET SALES                                               $           0    $   1,476,205    $           0    $     710,939
COST OF REVENUES                                                    0        1,113,533                0          529,768
                                                        -------------    -------------    -------------    -------------

         Gross profit                                               0          362,672                0          181,171

OPERATING EXPENSES
         Sales and marketing                                        0          (53,342)               0          (89,147)
         General and administrative                           654,625        1,555,246          282,758          569,341
         Website and software development                     (13,307)         999,221          (71,554)         466,051
                                                        -------------    -------------    -------------    -------------

         Total operating expenses                             641,318        2,501,125          211,204          946,245
                                                        -------------    -------------    -------------    -------------

                Loss from operations                         (641,318)      (2,138,453)        (211,204)        (765,074)

INTEREST INCOME, net                                           16,262           77,937            1,888           28,156
                                                        -------------    -------------    -------------    -------------

         Net loss                                       $    (625,056)   $  (2,060,516)   $    (209,316)   $    (736,918)
                                                        =============    =============    =============    =============

PER SHARE INFORMATION:

         Net loss per share -
                  Basic and diluted                     $       (0.08)   $       (0.25)           (0.03)           (0.09)
                                                        =============    =============    =============    =============

         Weighted average common shares outstanding -
                  Basic and diluted                         7,797,693        8,303,392        7,797,693        7,956,115
                                                        =============    =============    =============    =============
</TABLE>

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


                                        4
<PAGE>
<TABLE>
<CAPTION>

                                                     BIGSTAR ENTERTAINMENT, INC.
                                                CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                             (UNAUDITED)

                                                                    Six Months       Six Months      Three Months     Three Months
                                                                      Ended            Ended            Ended            Ended
                                                                   June 30, 2002    June 30, 2001    June 30, 2002    June 30, 2001
                                                                   -------------    -------------    -------------    -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                <C>              <C>              <C>              <C>
         Net loss                                                  $    (625,056)   $  (2,060,516)   $    (209,316)   $    (736,918)
           Depreciation and amortization                                       0          422,309                0          210,678
           Allowance for doubtful accounts                                (5,000)               0           (5,000)               0
           Changes in assets and liabilities -
              Accounts receivable                                         32,067          267,614            5,751           44,201
              Prepaids and other current assets                          (11,239)         240,464          (46,436)         (11,654)
              Other non current assets                                        90           80,150                0           36,949
              Accounts payable and accrued expenses                       41,314       (1,449,214)          62,686         (343,884)
                        Other current liabilities                        (16,334)         130,674          (16,334)         130,674
                                                                   -------------    -------------    -------------    -------------
         Net cash used in operating activities                          (584,158)      (2,368,519)        (208,649)        (669,954)
                                                                   -------------    -------------    -------------    -------------

CASH FLOWS FROM INVESTING ACTIVITIES:
         Sale and return of equipment                                          0           70,220                0           45,677
                                                                   -------------    -------------    -------------    -------------
                Net cash provided by investing activities                      0           70,220                0           45,677
                                                                   -------------    -------------    -------------    -------------

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

         Net increase (decrease) in cash and cash equivalents           (584,158)      (2,355,441)        (208,649)        (624,277)
                Reclassification of cash and cash equivalents to
                        restricted cash due to legal matter             (450,000)               0         (450,000)               0

CASH AND CASH EQUIVALENTS, beginning of period                         1,628,354        5,373,100        1,252,845        3,641,936
                                                                   -------------    -------------    -------------    -------------

CASH AND CASH EQUIVALENTS, end of period                           $     594,196    $   3,017,659    $     594,196    $   3,017,659
                                                                   =============    =============    =============    =============
</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. 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.



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 June 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


                                        6
<PAGE>

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 June 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 six months ended June 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 six months ended
June 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 six months ended June
30, 2002, and June 30, 2001 does not include the impact of 1,245,761 and
1,803,492 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 six months ended June 30, 2002 and the three and six
months ended June 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 this Statement 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 the company 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 our 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
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


                                        8
<PAGE>

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 $47,738,000 as of June 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.
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.

         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.


                                        9
<PAGE>

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
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.

         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


                                       10
<PAGE>

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.

         As a result of the terrorist attacks in New York City on September 11,
2001, the Company's headquarters at 19 Fulton Street was without electricity,
telephone and all electronic communication capabilities for almost three weeks.
As a result, the Company is currently looking at alternative locations and is
considering moving its headquarters out of the downtown Manhattan area.


RESULTS OF OPERATIONS -- The three and six-month periods ended June 30, 2002 and
June 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 six months ended June 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 six months ended June 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 six months ended June 30, 2002.
Comparison to prior year results would not be meaningful.

         GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative
expenses were approximately $283,000 and $655,000 for the three and six months
ended June 30, 2002 compared to $569,000 and $1,555,000 for the three and six
months ended June 30, 2001. General and administrative expenses include payroll
and related expenses for executive, accounting and administrative personnel,
which were approximately $123,000 and $305,000 respectively for the three and
six months ended June 30, 2002 compared to $342,000 and $994,000 respectively
for the three and six months ended June 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 $87,000 and $207,000
respectively, for the three and six months ended June 30, 2002 compared to
$33,000 and $95,000 respectively, for the three and six month periods ending
June 30, 2001. The costs of facilities also decreased to approximately $29,000
and $60,000, respectively for the three and six months ending June 30, 2002 from
$54,000 and $138,000, respectively, for the three and six months ending June 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 $72,000 and $13,000,
respectively, for the three and six months ended June 30, 2002, compared to
charges of approximately $466,000 and $999,000, respectively, for the three and
six months ended June 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 six
months ending June 30, 2002, and $81,000 and $221,000 for the three and six
months ending June 30, 2001 reflecting the decrease in the number of personnel
and related expenses. The costs of systems and telecommunications services were
credits of approximately $72,000 and $34,000, respectively, for the three and


                                       11
<PAGE>

six month periods ending June 30, 2002 as a result of settlements with vendors
to pay reduced amounts resulting in reversal of expenses previously recorded and
charges of approximately $349,000 and $732,000, respectively for the three and
six month periods ending June 30, 2001 reflecting the cessation of site activity
and reductions of expenses previously recorded.

         NET LOSS. Bigstar's net loss was $209,000 and $625,000, respectively
for the three and six month periods ended June 30, 2002 as compared to $737,000
and $2,061,000, respectively for the three and six month periods ending June 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
$47,738,000 as of June 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.

         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 six months
ended June 30, 2002 and 2001 of approximately $209,000 and $584,000 respectively
was primarily due to our net loss of approximately $209,000 and $625,000 for the
three and six month periods ending June 30, 2002.


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<PAGE>

         The Company has 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 June 30, 2002 the Company had working capital of approximately
$228,000 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 June 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 June 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. We have no material
commitments for capital expenditures and do not anticipate any significant
future purchases during the next 12 months.

         At June 30, 2002, Bigstar's principal commitments consisted of
obligations under non-cancelable operating leases for real estate and office
equipment. The minimum amounts payable under non-cancelable agreements was
approximately $77,000.


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         Not Applicable


ITEM 4.  CONTROLS AND PROCEDURES

         Not Applicable


                                       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:  September 5, 2002             David Friedensohn, Chief Executive Officer
                                      (Principal Executive, Accounting and
                                       Financial Officer)



                                     Rider F

                                  Certification

         I, David Friedensohn certify that:

         1.       I have reviewed the Registrant's Form 10-Q quarterly report
for the period ended June 30, 2002 (the "Report").

         2.       Based on my knowledge, the 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 the Report.

         3.       Based on my knowledge, the financial statements, and other
financial information included in the 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 the Report.


                                         /s/  DAVID FRIEDENSOHN
                                         ---------------------------------------
                                         Name:   David Friedensohn
                                         Title:  Chief Executive Officer
                                         (Chief executive and financial officer)


         EXPLANATORY NOTE REGARDING CERTIFICATIONS: Representations 4, 5 and 6
of the Certification as set forth in Form 10-Q have been omitted, consistent
with the Transition Provisions of SEC Exchange Act Release No. 34-46427, because
this Quarterly report of Form 10-Q covers a period ending before the Effective
Date of Rules 13a-14 and 15d-14.


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