================================================================================

                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   -----------

                                    FORM 10-K
     (Mark One)
[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934 For the fiscal year ended June 30, 2001

                                       OR

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934 For the transition period from ____________
     to ____________

                         Commission file number: 0-27556

                        YOUTHSTREAM MEDIA NETWORKS, INC.
                 (Exact Name of Business Issuer in Its Charter)


DELAWARE                                                              13-4082185
(State or Other Jurisdiction of             (I.R.S. Employer Identification No.)
Incorporation or Organization)


28 WEST 23RD STREET, NEW YORK, NEW YORK                                    10010
(Address of Principal Executive Offices)                              (Zip Code)


                                 (212) 622-7300
                (Issuer's Telephone Number, Including Area Code)


Securities registered under Section 12(b) of the Exchange Act: None

Securities registered under Section 12(g) of the Exchange Act:

                     Common Stock, par value $.0l per share
                                (Title of Class)

     Indicate by check mark whether the registrant (1) filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the past 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                                 Yes [X] No [ ]

     Indicate by check mark if there is no disclosure of delinquent filers in
response to Item 405 of Regulation S-K contained herein, and no disclosure will
be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K.

                                 Yes [X ] No [ ]

     State the aggregate market value of the voting and non-voting common equity
held by non-affiliates computed by reference to the price at which the common
equity was sold, or the average bid and asked price of such common equity, as of
July 17, 2001: $62 million.

     State the number of shares outstanding of each of the registrant's classes
of common equity, as of August 7, 2001: 30,091,354 shares of Common Stock.

                       DOCUMENTS INCORPORATED BY REFERENCE

     Portions of the registrant's definitive proxy statement under Regulation
14A, which statement will be filed not later than 120 days after the end of the
fiscal year covered by this report, are incorporated by reference in Part III
hereof.

================================================================================


<PAGE>


                        YOUTHSTREAM MEDIA NETWORKS, INC.
                           ANNUAL REPORT ON FORM 10-K

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>

ITEM NO.
--------
                                                                                                                PAGE
Part I                                                                                                          ----
<S>   <C>                                                                                                         <C>
      1.   Business..........................................................................................     1

      2.   Properties........................................................................................     7

      3.   Legal Proceedings.................................................................................     7

      4.   Submission of Matters to a Vote of Security Holders..............................................      7


Part II

      5.   Market for Common Equity and Related Stockholder Matters..........................................     8

      6.   Selected Financial Data...........................................................................     9

      7.   Management's Discussion and Analysis of Financial Condition and Results of Operations.............     9

      8.   Quantitative and Qualitative Disclosures about Market Risk........................................    12

      9.   Financial Statements and Supplemental Data........................................................    13

      10.  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure..............    13



Part III

      11.  Directors and Executive Officers of Registrant....................................................    14

      12.  Executive Compensation............................................................................    14

      13.  Security Ownership of Certain Beneficial Owners and Management....................................    14

      14.  Certain Relationships and Related Transactions....................................................    14

      15.  Exhibits, Financial Statement Schedules and Reports on Form 8-K...................................    14


Index to Consolidated Financial Statements...................................................................   F-1


Signatures ..................................................................................................   S-1


Schedule II Valuation and Qualifying Accounts................................................................   S-2

</TABLE>


<PAGE>


                                     PART I




ITEM 1. BUSINESS

DISCLOSURE REGARDING FORWARD LOOKING STATEMENTS

In addition to historical information, this Annual Report on Form 10-K contains
forward-looking statements within the meaning of Section 21E of the Securities
Exchange Act of 1934, as amended. Any statements contained herein (including but
not limited to statements to the effect that the Company or its management
"anticipates," "believes," "estimates," "expects," "intends," "plans" and
similar expressions) that relate to future events or conditions should be
considered forward-looking statements. These forward-looking statements are
subject to certain risks and uncertainties that could cause actual results to
differ materially from those reflected in forward-looking statements. Factors
that might cause such differences include, but are not limited to, those
discussed in the section entitled "Management's Discussion and Analysis of
Financial Condition and Results of Operations" on page 9 of this Form 10-K.
Readers of this Form 10-K are cautioned not to rely on these forward-looking
statements, which reflect management's opinions only as of the date hereof. The
Company undertakes no obligation to revise or publicly release the results of
any revision to these forward-looking statements, whether as a result of new
information, future events or otherwise.

OVERVIEW

YouthStream Media Networks, Inc., through its subsidiaries (together,
"YouthStream" or the "Company"), is a leading cross-platform media, marketing
services and retail company that targets teenagers and young adults ages 12 to
24. During fiscal 2001, YouthStream reorganized its operations into two market
segments: media and retail.

Through its media segment, YouthStream provides its clients with advertising,
marketing and promotions solutions that are targeted, integrated and, management
believes, more efficient than mass media alternatives at reaching the youth
audience. YouthStream's media segment operates primarily in schools and on and
near school campuses where students congregate. YouthStream maintains more than
22,000 proprietary "out-of-home" media distribution locations at more than 2,000
universities and colleges and 9,000 high schools and middle schools in the
United States. YouthStream also provides clients with the ability to advertise
online through its operation of the web site Teen.com, an award-winning Internet
destination for teenagers.

YouthStream's broad portfolio of assets and capabilities enables it to offer
programs that serve a large and diverse client base that includes more than 250
leading national advertisers in categories such as packaged goods, recruiting,
automotive, fashion, financial services, health and beauty and technology. Among
YouthStream's media clients in fiscal 2001 were Proctor & Gamble, Ford Motor
Company, AT&T, Sony/Columbia Pictures, ABC, The Coca-Cola Company, Motorola, The
Wall Street Journal, DKNY, Snapple, BMW, HBO and Seventeen Magazine.

YouthStream also operates a youth-oriented retail business, selling decorative
wall posters and related items through two distribution channels: on-campus
sales events and a nationwide chain of retail stores operating under the Beyond
the Wall(R) brand. Through these retail channels, YouthStream has become a
leading retailer of decorative wall posters to the young adult market.

COMPANY STRUCTURE

Founded in 1995 as Network Event Theater, Inc., the Company held its initial
public offering ("IPO") in 1996. In February 2000, Network Event Theater, Inc.
("NET") was reorganized and became a wholly-owned subsidiary of a
newly-established Delaware holding company, YouthStream Media Networks, Inc.
Headquartered in New York, New York, YouthStream's wholly-owned operating
subsidiaries are, in addition to NET: American Passage Media, Inc. ("American
Passage"); Trent Graphics, Inc. ("Trent"); and W3T, Inc. ("Teen.com").

A detailed discussion of the Company's acquisition history and organization can
be found in the footnotes to the Consolidated Financial Statements beginning on
page F5.


                                       1
<PAGE>


TARGET MARKET

Through its media segment, YouthStream targets clients seeking to reach 12 to 24
year-olds with entertainment, advertising and promotional messages.

These teenagers and young adults represent approximately 17% of the nation's
total population or 47.4 million individuals according to April 2000 U.S. Census
Bureau estimates, and control over $200 billion in direct purchasing power
annually. YouthStream believes the youth market is highly desirable to
advertisers because teens and young adults are receptive to new ideas and
products, are in a formative stage with respect to building brand loyalties,
have significant disposable income and are the next generation of consumers.
Advertisers seeking to reach this young adult market spend approximately $30
billion annually.

YouthStream targets this same audience for its retail business segment because
of all the reasons stated above.

MEDIA SEGMENT:  PRODUCTS AND SERVICES

Through its comprehensive portfolio of on-campus media assets and national
marketing services capabilities, YouthStream provides its clients with
unparalleled access to the youth market, with substantial cost efficiencies. Its
knowledge of the young adult market enables its clients to benefit from a wide
range of turnkey, customized and high impact programs. In fiscal 2001,
YouthStream generated approximately 63% of its revenues from its media segment.

Event Marketing

YouthStream's event marketing division performs a wide range of services for
clients. These services include developing, planning and executing custom events
and customer acquisition programs, as well as offering clients the opportunity
to participate in proprietary events conducted through its on-campus theater
division and other Company initiatives. During fiscal 2001, YouthStream's event
marketing business represented over 60 clients on more than 560 college
campuses, and reached seven million young people.

YouthStream's custom events are exciting programs targeted to address specific
client needs and brand objectives. Programs range from national vehicle tours to
single campus events. Other major events are conducted annually off campuses,
including at major student destinations during Spring Break and Mardi Gras, and
throughout the year in urban areas, malls, and at venues such as concerts,
beaches, and sporting events. Custom events typically feature client
advertising, including banners, mass flyer distribution, and branded vehicle
wraps; games to generate product awareness; and product sampling programs, which
provide a targeted and effective method of driving product trial and purchase,
and establishing brand loyalty.

YouthStream's customer acquisition business offers clients the ability to
intercept teenagers and young adults through sign-up programs, allowing clients
such as financial services, telecommunications and publishing companies to
obtain applicants for their products and services. The Company's extensive
nationwide network of field representatives is able to efficiently administer
sign-up events virtually anywhere young adults congregate.

During fiscal 2001, YouthStream also developed a number of proprietary event
marketing programs that the Company expects to launch during fiscal 2002. These
events provide a forum to showcase advertisers' products and services. The
Company's ThunderDorm(SM) Experience tour, scheduled to take place on college
campuses in Fall 2001, celebrates the latest and most interactive technology
intersecting the college lifestyle. Other YouthStream promotions will take place
targeting teens in malls and college students at Spring Break. The Company plans
to generate revenues from these programs by selling sponsorships and other
related media to advertisers.

YouthStream also conducts event marketing and advertising campaigns for clients
via its proprietary network of on-campus theaters ("Theaters"), consisting of
more than 100 major universities and colleges across the country. To generate
revenues, YouthStream partners with the country's largest movie production
studios, such as New Line Cinema, Warner Bros., Sony Pictures Entertainment,
Universal Pictures, and Paramount Pictures to create on-campus advance-screening
and marketing promotions targeting the young adult market. YouthStream obtains
revenues both from these studio partners, which contract with the Company to
plan and supervise national collegiate field marketing activities, and from
large national consumer


                                       2
<PAGE>


products advertisers, which augment studio screenings with their branding,
sampling and event marketing activities. The Company has concentrated on
establishing its Theaters at large enrollment colleges and universities located
in key markets that it believes enhance the Theaters' appeal to programmers,
sponsors and advertisers. The combined enrollment of campuses where Theaters are
installed totals 2.3 million.

Forty-nine of the network schools feature closed-circuit satellite and digital
projection technologies that allow YouthStream to simulcast movies, concerts,
featured speakers and other live events to student audiences nationwide.
Theaters with these satellite capabilities are installed on campuses with a
total enrollment exceeding 1.2 million. The Company believes this is the only
national network of digital satellite movie theaters on college and university
campuses.

The Company conducted 12 events at Theaters during the 2000-2001 academic year.
Average attendance at each event totaled approximately 20,000 students.

Media Planning and Buying

YouthStream's college newspaper network serves as a leading advertisement
placement service network, providing clients with the ability to run advertising
in over 1,700 college and graduate school newspapers, with a combined
circulation over 7 million, on campuses with total enrollment of 13 million
students. YouthStream's assets in print advertising include an exclusive
database containing information about every major college newspaper, allowing
the Company to provide creative development, marketing and research assistance,
and to customize programs for clients by targeting school type, student
demographics, degree programs, and other criteria.

Out-of-Home

YouthStream provides clients with unique and proprietary vehicles for delivering
advertising messages through its "Out-of-Home" media programs, directed to
students in the campus environment. YouthStream works directly with school
administrators and campus organizations to achieve placement of the Out-of-Home
media vehicles. With more than 22,000 Out-of-Home media distribution locations
at more than 2,000 universities and colleges, and 9,000 high schools and middle
schools throughout the United States, the Company believes this to be the
nation's largest campus-based Out-of-Home advertising network.

YouthStream's high school wallboards ("GymBoards(R)") allow clients to place
advertisements on gender specific message and information centers installed in
boys' and girls' high school and middle school locker rooms. With over 18,000
customized message boards and information centers located inside over 9,000
middle and high school locker rooms nationwide, YouthStream's GymBoards network
reaches a combined total enrollment in excess of 7.5 million students. The
Company believes GymBoards to be the nation's largest Out-of-Home media network
located in high schools and middle schools.

YouthStream's college wallboard network ("Campus Voice(R)") consists of more
than 4,000 metal-framed, Plexiglass-enclosed wallboards installed in
high-traffic locations on over 500 university and college campuses. In operation
for over 15 years on campuses with a combined total enrollment of over 3.7
million students, the Company believes its college campus network is the
nation's largest and most established. Partnering advertisers with editorial
content provided by top publications targeting the young adult audience,
advertising messages and editorial content are rotated monthly during the school
year.

YouthStream's poster advertising service provides clients with a cost-effective
method for reaching students in their own environments via bulletin boards on
campuses nationwide, a powerful and proven direct response vehicle.
YouthStream's national postering service has the capability to post advertising
messages on over 2,200 campuses, with the ability to reach more than 10 million
students nationwide. In operation for over 20 years, the Company believes it
operates the nation's most established and experienced national campus postering
services business.

YouthStream's postcard advertising network ("HotStamp(R)") provides clients with
the opportunity to have customized advertising messages produced and placed in
250 postcard racks at 175 colleges and universities nationwide. Postcard racks
are strategically installed at high-visibility sites including college
bookstores, student centers, and popular college hangouts. The Company believes
that these racks represent the largest campus-based network of free postcard
distribution racks nationwide.


                                       3
<PAGE>


YouthStream's network of college newspaper advertising stands ("AdRox(R)")
allows advertisers to place messages strategically on the headers of more than
2,000 campus newspaper distribution racks at over 275 colleges and universities
nationwide. Placed in the highest-traffic campus locations, this network reaches
a total enrollment of over 3.3 million students.

Internet

The Company's Teen.com website offers clients the ability to reach teenagers
online. During fiscal 2001, Teen.com won the Editor's Choice Award from PC
Magazine as the "Best of The Web" teen site. Teen.com also received recognition
as the No. 1 Information Site for 2001 from Teen People Magazine. Teen.com
differentiates itself from the competition by featuring relevant yet responsible
content targeted to teens.

Media Strategy

Since inception, the Company's media strategy has been to offer media and
marketing services programs to its clients that target youth where they live, go
to school and play. After its IPO, the Company concluded a series of
acquisitions that enabled it to quickly develop the necessary portfolio of
properties and infrastructure to implement this strategy. The Company's initial
focus was to utilize its assets to sell "multi-channel" programs to clients
interested in turnkey and targeted advertising solutions. The Company plans to
continue developing its media businesses to reach more of the nation's
teenagers, to reach more youth off-campus, and to reach teenagers and young
adults increasingly through larger, Company-designed proprietary events.

First, to reach more teenagers, the Company has been executing and plans to
conduct more events in malls and high schools where teenagers congregate, among
other things.

Second, to reach more youth off-campus, the Company has broadened the number and
location of venues in which it conducts business on behalf of its clients,
particularly in the event marketing area. The Company expects to continue to
expand its operations at social, sporting, and other events and venues
nationwide where young people interact.

Third, the Company increasingly has focused its sales force on selling more
integrated media solutions to clients - leveraging its products and services -
rather than selling individual products or services. The Company expects that
this strategy will continue to increase its average revenues per sale.

The Company also believes there may be growth opportunities in the consolidation
of companies targeting teenagers and young adults. From time to time, the
Company may consider acquisition opportunities that leverage its existing
strengths, broaden its customer base, reduce seasonal effects on its media
business or increase market share.

RETAIL SEGMENT:  PRODUCTS AND SERVICES

YouthStream believes it operates the nation's largest retailer of decorative
wall posters sold to teens and young adults. Currently, the Company's
merchandise is available at on-campus sales events, in retail stores, and via
the Internet. In fiscal 2001, the Company's retail segment generated
approximately 37% of the Company's revenues.

On-Campus College Poster Shows

The Company believes that it operates the largest network of on-campus poster
shows ("Sales Events") in the nation's college market. In fiscal 2001, more than
five million students participated in the Company's Sales Events, on more than
650 campuses nationwide. Student visitors to these Sales Events purchased more
than 775,000 posters and other items, choosing from approximately 2,000 posters,
prints and other merchandise, generating approximately 60% of the Company's
retail segment revenues for fiscal 2001.

Retail Store Operations; Online Sales

The Company also operates retail poster stores primarily in college towns and
major urban areas around the country, under the Beyond the Wall(R) name
("Stores"). As of June 30, 2001, the Company operated 31 Stores in cities
including: Ann Arbor, MI; Athens, GA; Berkeley, CA; Bloomington, IN; Boulder,
CO; Burlington, VT; Champaign, IL; Chicago, IL; Cincinnati; OH, East Lansing,
MI; Ithaca, NY; Knoxville, TN; Lexington, KY; Los Angeles, CA; New York, NY;
North Hampton, MA; Philadelphia, PA; Seattle, WA; State College, PA; and
Washington, D.C. Stores range from 900 to 3600 square feet and each


                                       4
<PAGE>


typically features over 5,000 posters on a rotating basis. Approximately 40% of
the Company's retail segment revenues were generated by Stores during fiscal
2001.

Through its website beyondthewall.com, the Company also offers thousands of
posters and artwork via the Internet.

Retail Strategy

The Company's retail strategy consists of several primary initiatives. First,
the Company plans to continue expanding the number of stores it operates, to 58
stores by the end of fiscal 2002.

Second, the Company also plans to broaden the range of locations where it
operates stores to include more stores in regional malls and urban areas. To
achieve this growth, the Company has installed three dedicated teams of
employees to identify new store locations nationwide. The Company's planned
growth in the number of stores it operates is designed to increase overall
revenues generated by the Company's retail segment.

Third, the Company plans to increase the profitability of its Stores by testing
a variety of new product lines, including inexpensive silver jewelry popular
among teens and young adults. By expanding its merchandise, the Company hopes to
increase store traffic, sell additional merchandise to its existing customers,
broaden its customer base, and decrease the seasonality of the Company's retail
segment.

Finally, the Company may expand the selling seasons or product mix of its
on-campus Sales Events.

Discontinued Businesses

During fiscal 2001, YouthStream discontinued operations of two online
properties, which had constituted its online business segment in fiscal 2000,
and two offline media properties.

The Company discontinued the operations of its sixdegrees.com web site in
December 2000. In May 2001, the Company also discontinued its application
service provider initiative to market and sublicense technology it purchased
through the acquisition of sixdegrees, inc., Invino Corporation, CollegeWeb,
Inc., and CommonPlaces, LLC ("CommonPlaces") in fiscal 2000.

The Company's postcards division operated a "cities program" which distributed
advertising through racks installed in more than 1,900 urban venues. YouthStream
sold these racks in June 2001 and discontinued its cities program.

The Company's Beyond the Wall division published and distributed an "Ads as Art"
catalog. The Company discontinued publication of this catalog in May 2001.


INTELLECTUAL PROPERTY RIGHTS

The Company has registered with the United States Patent and Trademark Office
the names "YouthStream Media Networks," "Y YouthStream Media Networks" (and the
YouthStream logo), "NET Network Event Theater," "NET" (and the NET logo),
"American Passage," "GymBoards," "AdRaX," "Campus Voice," "Campus Voice"
(stylized), "Beyond the Wall," and "HotStamp" in connection with its media
businesses.

The Company also has pending trademark/service mark applications with the United
States Patent and Trademark Office in connection with various new businesses.
These include: "FUND-U," "TEENSCREEN," and "THUNDERDORM."

Teen.com has protected its brand name by obtaining the exclusive right to the
domain name "Teen.com" from Network Solutions, Inc., and using the service mark
"THE PLACE FOR TEENS" in connection with the Teen.com website.

The Company's rights in these marks may be a significant part of its business.
The Company is not aware of any claims of infringement or other challenges to
its rights to use these marks, although the Company is aware of numerous other
registrations of the mark NET. There can be no assurance the Company's marks do
not or will not infringe the proprietary rights of others, that the Company's
marks would be upheld if challenged, or that the Company would not be prevented
from using its marks.


                                       5
<PAGE>


In January 2001, the Company received a patent titled "Method and Apparatus for
Constructing a Networking Database and System." The application for this patent
was filed in 1997 and relates to the technology that was underlying the
sixdegrees website.

The Company does not hold any copyright registrations.

The Company regards its patents, service marks, trademarks, trade dress, trade
secrets, proprietary technology and similar intellectual property as important
to its success, and relies on patent, trademark and copyright law, trade secret
protection and confidentiality and/or license agreements with its employees,
customers, independent contractors, sponsors, and others to protect its
proprietary rights. The Company strategically pursues the registration of its
trademarks and service marks. However, effective patent, trademark, service
mark, copyright and trade secret protection may not be available. There can be
no assurance that the steps taken by us to protect our proprietary rights will
be adequate or that third parties will not infringe or misappropriate our
patents, trademarks, trade secrets, trade dress and similar proprietary rights.
In addition, there can be no assurance that other parties will not independently
develop substantially equivalent intellectual property. In addition, litigation
may be necessary in the future to enforce our intellectual property rights, to
protect our trade secrets or to determine the validity and scope of the
proprietary rights of others. Such litigation could result in substantial costs
and diversion of financial and managerial resources, which could have a material
adverse effect on our business.

COMPETITION

Media

The Company's media business faces competition for the advertising revenues of
advertisers and sponsors from other similar companies and from other media such
as radio, television, print media, direct mail marketing and the Internet. The
Company also competes with a wide variety of other advertising media, the range
and diversity of which has increased substantially over the past several years
to include advertising displays in shopping centers and malls, airports,
stadiums, movie theaters and supermarkets, as well as on taxis, trains, buses
and subways. Some of the Company's competitors, principally in other media such
as radio and television, are substantially larger, better capitalized and have
access to greater resources than the Company. There can be no assurance that the
Company will be able to compete successfully with such other companies and
media.

Retail

The retail decorative wall poster industry for teens and young adults is both
highly competitive and fragmented. We believe that the principal bases upon
which we compete are selection, quality, price, store location and service. We
compete with other sellers of decorative art, some of which are more established
better capitalized or have access to greater resources than the Company.
However, there can be no assurance that the Company will be able to compete
successfully with such other companies.

Seasonal Effects on the Company's Business

The seasonality of our media and retail businesses affects our profitability.
Since our products are most often purchased during the academic school year
primarily from August through October, we experience substantial seasonality in
our sales and profitability during the year.

PERSONNEL

Media

As of July 31, 2001, the Company employed 124 full-time employees and 6
part-time employees in connection with its media operations. None of these
employees is represented by a collective bargaining unit, and the Company
believes that relations with these employees are good.


                                       6
<PAGE>


Retail

As of July 31, 2001, the Company employed 100 full-time employees and 92
part-time employees in connection with its retail operations. None of these
employees are represented by a collective bargaining unit, and the Company
believes that relations with these employees are good.


ITEM 2.  PROPERTIES

The Company's principal executive offices are located in approximately 22,000
square feet of leased space in New York City pursuant to a lease expiring during
the fiscal year ending June 30, 2006. Annual rent payable under that lease is
approximately $392,000. The Company also rents additional office space in
Cambridge and Acton, Massachusetts; Seattle, Washington; Los Angeles,
California; Chicago, Illinois; Tempe, Arizona; and Stroudsburg, Pennsylvania.
The Company also maintains short term leases for retail stores, which range from
approximately 900 to 3,600 square feet in Ann Arbor, Michigan; Athens, Georgia;
Berkeley, California; Bloomington, Indiana; Boulder, Colorado; Burlington,
Vermont; Champaign, Illinois; Chicago, Illinois; Cincinnati, Ohio; Cleveland,
Ohio; East Lansing, Michigan; Washington, D.C.; Hadley, Massachusetts;
Harrisburg, Pennsylvania; Harrisonburg, Virginia; Holyoke, Massachusetts;
Ithaca, New York; Knoxville, Tennessee; Lawrence, Kansas; Lexington, Kentucky;
Los Angeles, California; Minneapolis, Minnesota; Myrtle Beach, South Carolina;
New Hope, Pennsylvania; New York, New York; Northampton, Massachusetts;
Philadelphia, Pennsylvania; Pittsburgh, Pennsylvania; Portland, Maine; Saint
Louis, Missouri; Seattle, Washington; State College, Pennsylvania; Taylor,
Michigan; and Tempe, Arizona. The Company believes it has adequate insurance to
cover the value of its leased property and the personal property therein.


ITEM 3.  LEGAL PROCEEDINGS

The Company is not a party to any material pending legal proceeding and is not
aware of any contemplated proceeding that may be material.


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

The Company's Annual Meeting of Stockholders was held on May 18, 2001. At that
meeting, the Company's shareholders elected three Class II Directors to the
Board; ratified the selection of Ernst & Young LLP as the Company's Independent
Auditors; and approved an amendment to the 2000 Stock Incentive Plan ("Plan"),
permitting the Company to grant its non-employee directors discretionary stock
options under the Plan.

In connection with the election of directors, the shares of common stock present
in person or by proxy were voted as follows:

                                        For                   Withheld
                                 ----------------------------------------
     Metin Negrin                    26,417,948                360,741
     Howard Klein                    26,417,948                360,741
     Sidney I. Lirtzman              26,417,948                360,741

In connection with the proposal to ratify the selection of Ernst & Young LLP as
the Company's independent auditors for the year ending June 30, 2000, 26,727,847
shares were voted in favor of the proposal, 32,582 shares were voted against the
proposal and there were 18,260 abstentions. In connection with the amendment to
the 2000 incentive stock option plan, 26,172,256 shares were voted in favor of
the proposal, 592,433 shares were voted against the proposal, and there were
15,000 abstentions.


                                       7
<PAGE>


                                     PART II



ITEM 5.   MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The Company's common stock is traded on the Nasdaq National Market ("Nasdaq").
In May 2001, the Company changed its Nasdaq symbol from NETS to YSTM. The
following table sets forth the high and low closing bid prices for the common
stock as furnished by Nasdaq. The quotations reflect inter-dealer prices,
without retail mark-up, mark-down or commission, and may not represent actual
transactions.

                                                                  High     Low
   Fiscal 2000                                                    ----     ---
         First Quarter.....................................      29.19    16.00
         Second Quarter....................................      31.25    18.81
         Third Quarter.....................................      29.00    12.13
         Fourth Quarter....................................      10.69     5.44

   Fiscal 2001
         First Quarter.....................................       7.31     3.13
         Second Quarter....................................       3.78      .75
         Third Quarter.....................................       1.94      .75
         Fourth Quarter....................................       1.79      .63

As of August 1, 2001, there were approximately 182 registered holders of record
of the Company's common stock. The Company believes thousands of other holders
own the Company's common stock in street name. To date, the Company has not
declared or paid any dividends on its common stock. The payment by the Company
of dividends, if any, is within the discretion of the board of directors and
will depend on the Company's earnings, if any, its capital requirements and
financial condition, as well as other relevant factors. The board of directors
does not intend to declare any dividends in the foreseeable future but instead
intends to retain earnings for use in the Company's business operations.

In May 2001, the Board of Directors authorized the Company to make open market
purchases of the Company's common stock aggregating up to $2 million. As of June
30, 2001, the Company had purchased on the open market 143,000 shares at a cost
of $239,000.

RECENT SALES OF UNREGISTERED SECURITIES

On July 27, 2000, the Company issued $1,000,000 of 11% subordinated notes due
July 27, 2005, with an original issue discount of $35,000 and net proceeds to
the Company of $965,000 (the "$1,000,000 Notes"). Simultaneously, the Company
issued warrants to purchase 60,000 shares of Company common stock for $35,000 to
the purchaser of the $1,000,000 Notes. The $1,000,000 Notes were purchased by
one purchaser, Interequity Capital Partners, L.P., an institutional investor. No
placement agent existed for the $1,000,000 Notes.


                                       8
<PAGE>



ITEM 6.   SELECTED FINANCIAL DATA

The selected consolidated financial data should be read in conjunction with ITEM
7. Management's Discussion and Analysis of Financial Condition and Results of
Operation and the Company's consolidated financial statements and notes to those
consolidated financial statements included elsewhere in this Form 10-K.

<TABLE>
<CAPTION>

                                                                      Year ended June 30,
                                               -------------------------------------------------------------------
                                                   2001         2000          1999          1998         1997
                                               -------------------------------------------------------------------
                                                             (In thousands, except per share data)

<S>                                               <C>          <C>            <C>         <C>           <C>
Net sales and other income                        $ 26,892     $ 28,221       $ 13,266    $ 11,188      $  6,439
Net loss
     Loss from continuing operations               (33,244)     (10,023)       (9,190)      (7,231)       (6,157)
     Loss from discontinued operations            (204,559)     (39,865)           --           --            --
Net loss                                          (237,803)     (49,888)       (9,190)      (7,231)       (6,157)
Total assets                                        48,706      276,445        30,252       15,676        17,175
Long-term debt and capital lease
   obligations, less current portion                18,635       18,815         6,589        3,459         5,275

Basic and diluted
     Loss from continuing operations                 (1.14)       (0.47)        (0.72)       (0.69)        (0.71)
     Loss from discontinued operations               (6.97)       (1.89)           --           --            --
Net loss                                             (8.11)       (2.36)        (0.72)       (0.69)        (0.71)
Weighted average basic and diluted
   common stock outstanding                         29,334       21,111        12,800       10,508         8,715
</TABLE>


ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATION

The following discussion of the financial condition and results of operations of
the Company should be read in conjunction with the consolidated financial
statements and related notes thereto. The following discussion contains certain
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 may include, but are not limited
to, the Company's ability to execute its business plan in a timely manner, the
Company's management of growth, its ability to negotiate retail store leases on
favorable terms, its ability to maintain favorable relationships with the
schools where the Company conducts business, the ability to hire, train and
retain qualified personnel, new laws and regulations applicable to the Company's
and its clients' business including laws relating to issues such as privacy,
data collection, advertising, content regulation, and taxation, changing
consumer tastes and the impact of competitive products and pricing, conditions
in the markets in which the Company conducts business including the advertising,
media and retail markets and general economic conditions. The Company undertakes
no obligation to publicly release the results of any revisions to these
forward-looking statements that may be made to reflect any future events or
circumstances.

The Company's consolidated financial statements are not directly comparable from
period to period due to acquisition and discontinued activities. The following
financial analysis compares the twelve months ended June 30, 2001 with the
twelve months ended June 30, 2000 and compares the twelve months ended June 30,
2000 with the twelve months ended June 30, 1999.

RESULTS OF OPERATION
(in thousands)

Year Ended June 30, 2001 Compared with Year Ended June 30, 2000

In order to make more meaningful comparisons with fiscal 2000's full-year
results, adjustments for "contributed media revenue," HotStamp cities program
and Beyond the Wall have been made. Contributed media revenue was recognized
last year as a result of the Company's acquisition of a 48 percent minority
interest in CommonPlaces. After acquiring the remaining 52 percent in February
2000, contributed media revenue was no longer recognized. In fiscal 2001, the
Company


                                       9
<PAGE>


discontinued its HotStamp cities program and Beyond the Wall catalog and, as
such, their revenues were excluded from the adjusted revenue. The following
table represents revenue adjusted for contributed media, HotStamp cities program
and Beyond the Wall revenues.

(in thousands)
                                                         ---------------------
                                                          FY 2001    FY 2000
                                                         ---------------------

       Revenues as stated in the Financial Statements    $ 26,892    $ 28,221
       Contributed Media                                      --     $ (2,890)
                                                         ---------------------
       Subtotal                                          $ 26,892    $ 25,331

       HotStamp "Cities Program" and Beyond the Wall     $ (1,794)   $ (4,136)
                                                         ---------------------

       Adjusted Revenue                                  $ 25,098    $ 21,195
                                                         =====================

For the twelve months ended June 30, 2001, adjusted net revenues were $25,098
compared to $21,195 for the twelve months ended June 30, 2000. The revenue
growth of $3,903 was attributable to an increase of retail of $2,366 and an
increase in the media segment of $1,537. Revenue growth in the Company's retail
segment was attributable to the increase in the number of stores opened by the
Company and same store growth. Media revenue growth was attributable to the
event marketing business.

For the twelve months ended June 30, 2001, cost of sales was $15,043 as compared
to $12,838 for the twelve months ended June 30, 2000. The increase of $2,205 was
due to an increase of $1,540 in the media segment and a $665 increase in the
retail segment. Specifically, the acquisition of Teen.com during July 2000
accounted for all of the increase in the media segment. The increase in the
retail segment was a function of increased revenue.

For the twelve months ended June 30, 2001, selling, general and administrative
expenses were $21,749 as compared to $14,811 for the twelve months ended June
30, 2000. The increase of $6,938 was due to an increase of $2,738 in the media
segment and $4,200 in the retail segment. The media segment increase was
primarily due to the acquisition of Teen.com. The retail segment increase of
$4,200 was due to $2,800 of one-time costs related to the acquisition of Trent
and the remaining $1,400 due to increased expenses related to expansion of the
retail store chain.

For the twelve months ended June 30, 2001, corporate expenses were $8,163 as
compared to $6,041 for the twelve months ended June 30, 2000. The increase of
$2,122 includes $1,100 related to the cost of expanding the senior management
team, $500 related to the exploration of a venture in the People's Republic of
China, and $522 relating to severance and moving expenses.

For the twelve months ended June 30, 2001, depreciation and amortization
expenses were $5,487 ($2,299 in Cost of Sales) as compared to $3,500 ($1,648 in
Cost of Sales) for the twelve months ended June 30, 2000. The increase of $1,987
includes $1,459 related to the amortization of Teen.com goodwill, as Teen.com
was acquired in July 2000. The remaining increase of $528 was due to the
increased fixed assets in the media segment as well as the additional stores in
the retail segment.

For the twelve months ended June 30, 2001, impairment loss on assets was
$10,680. This entailed a charge of $4,750 for the write-down of a promotional
credit that was acquired by the Company when it purchased sixdegrees, inc., a
write-down of $1,845 for the remaining HotStamp(R) assets, a write-down of $317
on the remaining goodwill of Beyond the Wall(R) and a write-down of $3,768 of
goodwill relating to Teen.com.

For the twelve months ended June 30, 2001, there was no equity loss on
investment as compared to $2,890 for the twelve months ended June 30, 2000. The
2000 loss represents the Company's minority interest share of the loss in
CommonPlaces.

For the twelve months ended June 30, 2001, interest income was $2,131 as
compared to $1,617 for the twelve months ended June 30, 2000. The increase of
$514 was due to interest income earned on increased cash balances resulting from
the issuance of debt and the sale of common stock.

For the twelve months ended June 30, 2001, interest expense was $3,169 as
compared to $1,000 for the twelve months ended June 30, 2000. The increase of
$2,169 was primarily related to the increase in long-term debt.


                                       10
<PAGE>


For the twelve months ended June 30, 2001, loss from discontinued operations was
$40,606 as compared to $39,865 for the twelve months ended June 30, 2000. The
twelve months ended June 30, 2001, loss from discontinued operations of $40,606
represent operating losses for the online segment from July to the December 2000
measurement date. The twelve months ended June 30, 2000, loss from discontinued
operations of $39,865 represent operating losses for the online segment incurred
during the period January to June 2000.

For the twelve months ended June 30, 2001, loss on disposal of discontinued
operations was $163,953. The loss on disposal primarily represents the
write-down of net assets, including goodwill of the online segment and provision
for operating losses during the phase-out period. The final disposal occurred
during the twelve months ended June 30, 2001.

Year Ended June 30, 2000 Compared with Year Ended June 30, 1999

For the twelve months ended June 30, 2000, net revenues were $28,221 as compared
to $13,266 in the prior year. The increase of $14,955 was primarily due to the
acquisition of Trent, which accounted for $7,520 of the increase. Additionally,
contributed media revenues for CommonPlaces accounted for $2,890 of the
increase. The remaining $4,545 was primarily due to increased sales in postcard,
event marketing, Gymboards(R), postering, campus wallboards, and theater
operations as well as the full year impact of the HelloXpress, Inc. acquisition,
which was completed in June 1999.

For the twelve months ended June 30, 2000, cost of goods sold was $12,838 as
compared to $8,375 in the prior year. $1,765 of the cost of goods sold related
to Trent's operations, which was acquired during 2000. The remaining increase of
$2,698 related to increased levels of revenue in the media segment.

For the twelve months ended June 30, 2000, selling, general and administrative
expenses were $14,811 as compared to $7,514 in the prior year. The increase of
$7,297 was primarily due to the acquisition of Trent, which accounted for $5,835
of the increase. The remaining increase of $1,462 was due to increased level of
sales and administrative staff to support the increase in revenues.

For the twelve months ended June 30, 2000, corporate expenses were $6,041 as
compared to $4,510 in the prior year. The increase of $1,531 was primarily due
to the cost incurred in terminating an operating lease, which accounted for
$1,666 of the increase which was offset by the net of the $425 increase of
corporate personnel and related overhead expenses and the $560 decrease in bonus
expense.

For the twelve months ended June 30, 2000, depreciation and amortization was
$3,500 as compared to $2,186 in the prior year. The increase of $1,314 was
primarily due to the additional amortization of goodwill of Trent, HelloXpress,
Inc., and CollegeWeb, Inc.

For the twelve months ended June 30, 1999, impairment loss on equipment was
$825. The loss was the result of determination by management that certain
theater and location based media equipment no longer had remaining economic
life.

For the twelve months ended June 30, 2000, equity loss in investment was $2,890
as compared to $51 in the prior year, representing the Company's minority
interest share of the loss in CommonPlaces. Subsequent to the acquisition in
February 2000 of the interests in CommonPlaces not previously owned by NET, the
operations of CommonPlaces were included in the Company's results on a
consolidated basis as part of the loss from discontinued operations.

For the twelve months ended June 30, 2000, interest income was $1,617 as
compared to $425 in the prior year. The increase of $1,192 was due to interest
income earned on increased cash balances resulting primarily from the sale of
additional common stock.

For the twelve months ended June 30, 2000, other income of $64 primarily
represented licensing fees relating to CollegeWeb, Inc. and Invino Corp. due
from CommonPlaces, prior to its merger with the Company.

For the twelve months ended June 30, 2000, interest expense was $1,000 as
compared to $1,119 in the prior year. The decrease of $119 primarily related to
a decrease in the average amount of long-term debt in 2000.

For the twelve months ended June 30, 2000, provision for income taxes was $493
as compared to $185 in the prior year for taxes primarily based on net assets
and net revenues.


                                       11
<PAGE>


For the twelve months ended June 30, 2000, net loss was $49,888 as compared to
$9,190 in the prior year. The increase of $40,698 primarily relates to the
discontinued operations of its online segments. The increase was also a result
of increased cost of goods sold, selling, general and administrative expenses,
corporate expenses, depreciation and amortization, and interest expense,
partially offset by increased revenues, other income, interest income and a
reduction in impairment loss on equipment.

LIQUIDITY AND CAPITAL RESOURCES

The Company used approximately $20.9 million of cash in operating activities in
2001, primarily funding its discontinued segments as well as its operating
losses from its continuing business. The Company funded its operations with cash
generated by the sale of investments in marketable debt securities.

As of June 30, 2001, the Company had approximately $14.9 million in cash and
equivalents. The Company believes that such amounts plus an additional amount of
$5.7 million, which represents investments in marketable debt securities with
maturities of less than one year, will be sufficient to fund working capital,
including debt service and interest expense, at least through the fiscal year
ended June 30, 2002. In the event that the Company's plans and assumptions for
each of its operations, with regard to the Company's ability to fund operations,
working capital, capital expenditures and debt repayments, prove to be
inaccurate, the Company could be required to seek additional financing. The
Company's ability to improve its operations will be subject to prevailing
economic conditions and to legal, financial, business, regulatory, industry and
other factors, many of which are beyond the Company's control. The Company may
also seek additional debt or equity financing to develop or acquire additional
media and marketing services businesses and retail expansion or to fund its
operations. To the extent that the Company finances its requirements through the
issuance of additional equity securities, any such issuance would result in
dilution to the interests of the Company's stockholders.

Additionally, to the extent that the Company incurs indebtedness or issues debt
securities in connection with financing activities, the Company will be subject
to all of the risks associated with incurring substantial indebtedness,
including the risk that interest rates may fluctuate and cash flow may be
insufficient to pay principal and interest on any such indebtedness. The Company
has no current arrangements with respect to, or sources of, additional
financing. There can be no assurance that any additional financing will be
available to the Company on acceptable terms, if at all.

The Company currently projects over thirty-five percent increase in revenues in
fiscal year 2002 in both the media and retail segments. Growth in the media
segment is expected to be broad based but driven primarily by event marketing
and promotions. These projections assume improvement in the advertising market
and continued growth in the Company's retail operations, among other things. The
retail segment revenue growth is comprised of same store year-over-year growth,
new store openings and price increases for the campus sales events. The Company
also projects earnings before interest, taxes, depreciation and amortization
("EBITDA") to be positive in the first quarter of fiscal 2002 and in the full
fiscal year 2002 due to projected increase in revenues, as well as projected
improvements in operating margins. The projected EBITDA improvement is expected
to reduce cash consumption below $7.0 million in fiscal year 2002 including an
expected $3.0 million of capital investments in the business. The Company
expects a net loss of less than $10.0 million. The Company projects that it will
sustain its revenue growth momentum through fiscal year 2003, which should
result in improved EBITDA, sufficient to generate positive cash flow and
positive net income in fiscal year 2003.


ITEM 8.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market Risk

Our accounts receivable are subject, in the normal course of business, to
collection risks. We regularly assess these risks and have established policies
on business practices to protect against the adverse effects of collection
risks.

Interest Rate Risk

Our investments are classified as cash and cash equivalents and debt securities
with original maturities of three months or less. Therefore, changes in the
market's interest rates do not affect the value of the investments as recorded
by us.


                                       12
<PAGE>


ITEM 9.   FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA

Information with respect to this item appears as a separate section following
Item 14 of this report. Such information is incorporated herein by reference.

ITEM 10.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
          FINANCIAL DISCLOSURE

None.


                                       13
<PAGE>


                                    PART III


ITEM 11.   DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information required by this Item is incorporated herein by reference to the
Company's definitive proxy statement to be filed with the Securities and
Exchange Commission pursuant to Regulation 14A within 120 days after the end of
the fiscal year covered by this report (the "Company's Proxy Statement").


ITEM 12.   EXECUTIVE COMPENSATION

The information required by this item is incorporated herein by reference to the
Company's Proxy Statement.


ITEM 13.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information required by this item is incorporated herein by reference to the
Company's Proxy Statement.


ITEM 14.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required by this item is incorporated herein by reference to the
Company's Proxy Statement.



ITEM 15.   EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)     The following documents are filed as part of this report:

        (1)     Financial Statements: Consolidated Balance Sheets at June 30,
                2001 and 2000, Consolidated Statements of Operations for the
                years ended June 30, 2001, 2000 and 1999, Consolidated
                Statements of Cash Flows for the years ended June 30, 2001, 2000
                and 1999, Consolidated Statements of Stockholders' Equity for
                the years ended June 30, 2001, 2000 and 1999

        (2)     Financial Statement Schedules: Schedule II Valuation and
                Qualifying Accounts [All other financial schedules have been
                omitted because they are not applicable or the required
                information is shown in the financial statements or notes
                thereto.]

(b)     Reports on Form 8-K filed on August 24, 2001.

(c)     Exhibits:

3.1     Certificate of Incorporation (incorporated by reference to Exhibit 3.1
        to the Company's Registration Statement on Form SB-2, Registration No.
        33-80935, filed on March 6, 1996).

3.2     Certificate of Amendment of Certificate of Incorporation (incorporated
        by reference to Exhibit 3.2 to the Company's Registration Statement on
        Form SB-2, Registration No. 33-80935, filed on March 6, 1996).

3.3     Certificate of Amendment of Certificate of Incorporation (incorporated
        by reference to Exhibit 3.3 to the Company's Form 10-KSB for the fiscal
        year ended June 30, 1998, filed May 27, 1998).

3.4     Bylaws (incorporated by reference to Exhibit 3.3 to the Company's
        Registration Statement on Form SB-2, Registration No. 33-80935, filed on
        March 6, 1996).

3.5     Bylaws (incorporated by reference to Exhibit 4.2 to YouthStream's
        Registration Statement on Form S-8, Registration No. 333-32022, filed on
        March 9, 2000).

4.1     Warrant Agreement (incorporated by reference to Exhibit 4.1 to the
        Company's Registration Statement on Form SB-2, Registration No.
        33-80935, filed on March 6, 1996).


                                       14
<PAGE>


4.2     Underwriter's Warrant (incorporated by reference to Exhibit 4.2 to the
        Company's Registration Statement on Form SB-2, Registration No.
        33-80935, filed on March 6, 1996).

10.1    Employment Stock Option Plan of the Company (incorporated by reference
        to Exhibit 10.1 to the Company's Registration Statement on Form SB-2,
        Registration No. 33-80935, filed on March 6, 1996).

10.2    Employment Agreement between the Company and Harlan D. Peltz
        (incorporated by reference to Exhibit 10.2 to the Company's Registration
        Statement on Form SB-2, Registration No. 33-80935, filed on March 6,
        1996).

10.3    Employment Agreement between the Company and Don Leeds (incorporated by
        reference to Exhibit 1 to the Company's Form 10-QSB for the quarterly
        period ended June 30, 1996).

10.4    Non-Incentive Stock Option Agreement dated June 17, 1996 between the
        Company and Don Leeds (incorporated by reference to Exhibit 10.3 to the
        Company's Form 10-QSB for the quarterly period ended June 30, 1996).

10.5    Employment Agreement between the Company and Bruce L. Resnik
        (incorporated by reference to Exhibit 2 to the Company's Form 10-QSB for
        the quarterly period ended September 30, 1996).

10.6    NET Portfolio Investors Agreement dated December 21, 1995 between the
        Company and NET Portfolio Investors, L.P. (incorporated by reference to
        Exhibit 10.5 to the Company's Registration Statement on Form SB-2,
        Registration No. 33-80935, filed on March 6, 1996).

10.7    Standard Form of School Contract (incorporated by reference to Exhibit
        10.8 to the Company's Registration Statement on Form SB-2, Registration
        No. 33-80935, filed on March 6, 1996).

10.8    Asset Purchase Agreement dated September 13, 1996 among American Passage
        Media Corporation, Gilbert Scherer, the Company and American Passage
        Media, Inc. (incorporated by reference to Exhibit 2 to the Company's
        Form 8-K, filed on September 28, 1996).

10.9    Option Agreement between the Company and American Passage Media
        corporation (incorporated by reference to Exhibit 5 to the Company's
        Form 8-K, filed on September 28, 1996).

10.10   Bill of Sale and Agreement dated January 31, 1997 among SCCGS, Inc.,
        Sirrom Capital Corporation, Campus Voice, L.L.C. and the Company
        (incorporated by reference to Exhibit 10.23 to the Company's Form 10-KSB
        for the fiscal year ended June 30, 1997).

10.11   Asset Purchase Agreement dated April 11, 1997 among Posters Preferred,
        Inc., Dennis Roche, Brian Gordon and the Company (incorporated by
        reference to Exhibit 10.30 to the Company's Form 10-KSB for the fiscal
        year ended June 30, 1997).

10.12   Asset Purchase Agreement dated April 30, 1997 among the Company, Pik:Nik
        Media, LLC, Pik:Nik, LLC and Garth Holsinger, Annett Schaefer-Sell and
        Sunny Smith (incorporated by reference to Exhibit 10.31 to the Company's
        Form 10-KSB for the fiscal year ended June 30, 1997).

10.13   Stock Purchase Agreement dated June 24, 1997 among Warburg, Pincus
        Emerging Growth Fund, Inc., Small Company Growth Portfolio of Warburg,
        Pincus Institutional Fund, Inc. and the Company (incorporated by
        reference to Exhibit 10.32 to the Company's Form 10-KSB for the fiscal
        year ended June 30, 1997).

10.14   Registration Rights Agreement dated June 24, 1997 among Warburg, Pincus
        Emerging Growth Fund, Inc., Small Company Growth Portfolio of Warburg,
        Pincus Institution Fund, Inc., and the Company (incorporated by
        reference to Exhibit 10.33 to the Company's Form 10-KSB for the fiscal
        year ended June 30, 1997).


                                       15
<PAGE>


10.15   Stock Purchase Agreement dated December 23, 1997 between the Company and
        Dirrom Investments, Inc. (incorporated by reference to Exhibit 10.15 to
        the Company's Form 10-KSB for the fiscal year ended June 30, 1998).

10.16   Placement Manager Agreement (incorporated by reference to Exhibit 10.17
        to the Company's Form 10-KSB for the fiscal year ended June 30, 1998).

10.17   Form of Stock Purchase Agreement (incorporated by reference to Exhibit
        10.1 to the Company's Form 10-KSB for the fiscal year ended June 30,
        1998).

10.18   Loan Agreement dated December 30, 1997 between First Union National
        Bank, American Passage Media, Inc., Beyond the Wall, Inc. and Campus
        Voice, Inc. (incorporated by reference to Exhibit 10.18 to the Company's
        Form 10-KSB for the fiscal year ended June 30, 1998).

10.19   Unconditional Guaranty dated December 30, 1997 by the Company and
        National Campus Media, Inc. in favor of First Union National Bank
        (incorporated by reference to Exhibit 10.19 to the Company's Form 10-KSB
        for the fiscal year ended June 30, 1998).

10.20   Merger Agreement dated June 9, 1999 among the Company, Trent Acquisition
        Co., Inc., Trent Graphics, Inc. and Charles Sirolly, Thomas Sirolly,
        Daniel Sirolly and William Sirolly (incorporated by reference to Exhibit
        2 to the Company's Form 8-K filed June 24, 1999).

10.21   Asset Purchase Agreement dated June 10, 1999 among the Company, Pik:Nik
        Media, Inc., HelloXpress USA, Inc., and Dalia Smith and Ron Smith
        (incorporated by reference to Exhibit 2 to the Company's Form 8-K filed
        June 24, 1999).

10.22   Option Agreement dated August 3, 1999 among the Company, New CW, Inc.,
        CollegeWeb.com, Inc. and J. Alexander Chriss and Todd M. Ragaza
        (incorporated by reference to Exhibit 10.22 to the Company's Form 10-KSB
        for the fiscal year ended June 30, 1999).

10.23   Agreement and Plan of Merger dated August 3 1999 among the Company, New
        CW, Inc., CollegeWeb.com, Inc. and J. Alexander Chriss and Todd M.
        Ragaza (incorporated by reference to Exhibit 10.23 to the Company's Form
        10-KSB for the fiscal year ended June 30, 1999).

10.24   Operating Agreement of Common Places, LLC (incorporated by reference to
        Exhibit 10.1 to the Company's quarterly report on Form 10-QSB for the
        quarter ended December 31, 1998).

10.25   Agreement and Plan of Merger dated June 28, 1999 among the Company,
        Common Places, LLC, YouthStream Media Networks, Inc., Nunet, Inc.,
        Nucommon, Inc., a wholly owned subsidiary of New Parent, Harlan Peltz,
        Benjamin Bassi, William Townsend and Mark Palmer (incorporated by
        reference to Exhibit 10.25 to the Company's Form 10-KSB for the fiscal
        year ended June 30, 1999).

10.26   Restated Certificate of Incorporation of YouthStream Media Networks,
        Inc. (incorporated by reference to Exhibit 10.26 to the Company's Form
        10-KSB for the fiscal year ended June 30, 1999).

10.27   Rights Agreement between YouthStream Media Networks, Inc. and the Rights
        Agent (unsigned and undated) (incorporated by reference to Exhibit 10.27
        to the Company's Form 10-KSB for the fiscal year ended June 30, 1999).

10.28   YouthStream Media Networks, Inc. 2000 Stock Incentive Plan (incorporated
        by reference to Exhibit 10.28 to the Company's Form 10-KSB for the
        fiscal year ended June 30, 1999).

10.29   Voting Trust Agreement among YouthStream Media Networks, Inc., Benjamin
        Bassi, William Townsend, Mark Palmer, Harlan Peltz and the Voting
        Trustee (incorporated by reference to Exhibit 10.29 to the Company's
        Form 10-KSB for the fiscal year ended June 30, 1999).


                                       16
<PAGE>


10.30   Stockholders Agreement among YouthStream Media Networks, Inc., Benjamin
        Bassi, William Townsend, Mark Palmer, Harlan Peltz individually, Harlan
        Peltz as voting trustee (incorporated by reference to Exhibit 10.30 to
        the Company's Form 10-KSB for the fiscal year ended June 30, 1999).

10.31   Employment Agreement between YouthStream Media Networks, Inc. And
        Benjamin Bassi (incorporated by reference to Exhibit 10.31 to the
        Company's Form 10-KSB for the fiscal year ended June 30, 1999).

10.32   Employment Agreement between YouthStream Media Networks, Inc. And Harlan
        Peltz (incorporated by reference to Exhibit 10.32 to the Company's Form
        10-KSB for the fiscal year ended June 30, 1999).

10.33   Merger Agreement dated December 14, 1999 among the Company, Sixdegrees
        Acquisition Corp. and sixdegrees, inc. (incorporated by reference to
        Exhibit 10.33 to the Company's Form 8-K filed January 20, 2000).

10.34   Certificate of Designation of Series A Convertible Preferred Stock of
        the Company (incorporated by reference to Exhibit 10.34 to the Company's
        Form 8-K filed January 20, 2000).

10.35   1999 Stock Option Plan of the Company (incorporated by reference to
        Exhibit 10.35 to the Company's Form 8-K filed January 20, 2000).

10.36   1999 Special Stock Option Plan of the Company (incorporated by reference
        to Exhibit 10.36 to the Company's Form 8-K filed January 20, 2000).

10.37   1999 Special Incentive Stock Plan of the Company (incorporated by
        reference to Exhibit 10.37 to the Company's Form 8-K filed January 20,
        2000).

10.38   Employment Agreement dated June 20, 2000 between YouthStream Media
        Networks, Inc. and James G. Lucchesi (incorporated by reference to
        Exhibit 10.38 to the Company's Form 10-KSB filed September 27, 2000).

10.39   Non-Qualified Stock Option Agreement of James G. Lucchesi dated June 20,
        2000 (incorporated by reference to Exhibit 10.39 to the Company's Form
        10-KSB filed September 27, 2000).

10.40   Amendment to Employment Agreement as of June 20, 2000 between
        YouthStream Media Networks, Inc. and Harlan D. Peltz (incorporated by
        reference to Exhibit 10.40 to the Company's Form 10-KSB filed September
        27, 2000).

10.41   Employment Agreement dated July 1, 2000 between YouthStream Media
        Networks, Inc. and Thea A. Winarsky (incorporated by reference to
        Exhibit 10.41 to the Company's Form 10-KSB filed September 27, 2000).

10.42   Merger Agreement dated July 13, 2000 among YouthStream Media Networks,
        Inc., W3T Acquisition, Inc., a wholly-owned subsidiary of YouthStream,
        W3T.com, Inc., Gerald Croteau, Eugene Bellotti, Donald Dion, Richard
        King, James Westra, Mark Fusco, Suzanne W. Bookstein and John Genest
        (incorporated by reference to Exhibit 10.42 to the Company's Form 10-KSB
        filed September 27, 2000).

10.43   Consulting and Non-Competition Agreement dated July 25, 2000 between
        YouthStream Media Networks, Inc. and Andrew P. Weinreich (incorporated
        by reference to Exhibit 10.43 to the Company's Form 10-KSB filed
        September 27, 2000).

10.44   Amendment No. 1 dated July 28, 2000 to Stockholders Agreement dated
        February 28, 2000 among YouthStream Media Networks, Inc., Benjamin
        Bassi, William Townsend, Mark Palmer, Harlan D. Peltz, individually, and
        Harlan D. Peltz, as voting trustee (incorporated by reference to Exhibit
        10.44 to the Company's Form 10-KSB filed September 27, 2000).

10.45   Non-Qualified Stock Option Agreement of Thea A. Winarsky dated August
        16, 2000 (incorporated by reference to Exhibit 10.45 to the Company's
        Form 10-KSB filed September 27, 2000).


                                       17
<PAGE>


10.46   Non-Qualified Stock Option Agreement of James G. Lucchesi dated
        September 26, 2000 (incorporated by reference to Exhibit 10.46 to the
        Company's Form 10-KSB filed September 27, 2000).

10.47*  Non-Qualified Stock Option Agreementof James G. Lucchesi dated July 2,
        2001.

10.48*  Non-Qualified Stock Option Agreement of James G. Lucchesi dated July 2,
        2001.

10.49*  Amendment to the Employment Agreement (dated June 20, 2000) dated June
        29, 2001 for James G. Lucchesi.

10.50*  Amendment to Non-Qualified Stock Option Agreement (dated July 31, 2000)
        dated June 29, 2001 for James G. Lucchesi.

10.51*  Amendment to Non-Qualified Stock Option Agreement (dated June 20, 2000)
        dated June 29, 2001 for James G. Lucchesi.

21*     Subsidiaries of the Company.

23*     Consent of Ernst & Young LLP.

---------------

*Filed herewith


                                       18
<PAGE>


                        YOUTHSTREAM MEDIA NETWORKS, INC.
                        CONSOLIDATED FINANCIAL STATEMENTS


                                      INDEX


Report of Independent Auditors...............................................F-2


Consolidated Financial Statements:

Consolidated Balance Sheets at June 30, 2001 and 2000........................F-3

Consolidated Statements of Operations for the years ended
June 30, 2001, 2000 and 1999.................................................F-4

Consolidated Statements of Cash Flows for the years ended
June 30, 2001, 2000 and 1999.................................................F-5

Consolidated Statements of Stockholders' Equity for the years ended
June 30, 2001, 2000 and 1999.................................................F-7

Notes to Consolidated Financial Statements...................................F-8


The following consolidated financial statement schedule of YouthStream
Media Networks, Inc. is included in Item 14(a):

Schedule II: Valuation and qualifying accounts...............................S-2

All other schedules for which provision is made in the applicable accounting
regulation of the Securities and Exchange Commission are not required under the
related instructions or are inapplicable and therefore have been omitted.


                                      F-1
<PAGE>


                         REPORT OF INDEPENDENT AUDITORS



Board of Directors
YouthStream Media Networks, Inc.

We have audited the accompanying consolidated balance sheets of YouthStream
Media Networks, Inc. and subsidiaries ("the Company") as of June 30, 2001 and
2000, and the related consolidated statements of operations, cash flows and
changes in stockholders' equity for each of the three years in the period ended
June 30, 2001. Our audits also included the financial statement schedule listed
in the Index at item 14(a). These financial statements and schedule are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
YouthStream Media Networks, Inc. and subsidiaries at June 30, 2001 and 2000, and
the consolidated results of their operations and their cash flows for each of
the three years in the period ended June 30, 2001 in conformity with accounting
principles generally accepted in the United States. Also, in our opinion, the
related financial statement schedule, when considered in relation to the basic
financial statements taken as a whole, presents fairly, in all material
respects, the information set forth therein.


                                           /s/ Ernst & Young LLP


New York, New York
August 2, 2001


                                      F-2
<PAGE>


                        YOUTHSTREAM MEDIA NETWORKS, INC.
                           CONSOLIDATED BALANCE SHEETS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>

                                                                                      June 30,          June 30,
                                                                                        2001             2000
                                                                                     ---------         ---------
<S>                                                                                  <C>               <C>
Assets
Current assets:
   Cash and equivalents ..........................................................   $  14,927         $  18,232
   Marketable debt securities, at amortized cost .................................       5,655            25,189
   Accounts receivable, net of allowance for doubtful
       accounts of $191 and $404 at June 30, 2001 and 2000, respectively .........       2,585             4,631
   Inventories, net of allowance of $146 and $0 at June 30, 2001 and 2000,
       Respectively ..............................................................       2,606             1,471
   Prepaid expenses ..............................................................         387             5,372
   Deposits and other current assets .............................................         241             2,905
                                                                                     ---------         ---------
Total current assets .............................................................      26,401            57,800

Property and equipment, net ......................................................       6,817             8,165
Deferred financing costs, net ....................................................       3,375             3,963
Intangible assets, net ...........................................................      10,785            13,709
Restricted cash ..................................................................       1,328             1,328
Net non-current assets of discontinued operations ................................          --           191,091
Other assets .....................................................................          --               389
                                                                                     ---------         ---------
Total assets .....................................................................   $  48,706         $ 276,445
                                                                                     =========         =========
Liabilities and stockholders' equity Current liabilities:
   Accounts payable ..............................................................   $   2,820         $   1,589
   Accrued employee compensation .................................................       2,018               895
   Other accrued expenses ........................................................       3,253             2,424
   Net current liabilities of discontinued operations ............................       3,078             2,187
   Deferred revenues .............................................................       1,751               665
   Current portion of deferred purchase price ....................................       1,500                45
   Current portion of capitalized lease obligations ..............................          46                83
   Current portion of long-term debt .............................................       1,169             1,275
                                                                                     ---------         ---------
Total current liabilities ........................................................      15,635             9,163
Net non-current liabilities of discontinued operations ...........................         185                --
Capitalized lease obligations ....................................................           5               106
Long-term debt ...................................................................      18,630            18,709
Deferred rent ....................................................................         366               353
Deferred purchase price ..........................................................         375             3,700

Commitments and contingencies ....................................................          --                --

Stockholders' equity:
   Preferred stock, $.01 par value, 5,000 shares authorized,
      no shares issued and outstanding ...........................................          --                --
   Common stock, $.01 par value, 100,000 shares authorized,
      30,091 shares issued at June 30, 2001
      and 28,031 issued and outstanding at June 30, 2000 .........................         301               280
   Additional paid-in capital ....................................................     329,097           321,980
   Accumulated deficit ...........................................................    (315,649)          (77,846)
   Treasury stock, 143 shares at June 30, 2001 ...................................        (239)               --
                                                                                     ---------         ---------
Total stockholders' equity .......................................................      13,510           244,414
                                                                                     ---------         ---------
Total liabilities and stockholders' equity .......................................   $  48,706         $ 276,445
                                                                                     =========         =========
</TABLE>


                 See notes to consolidated financial statements.


                                      F-3
<PAGE>



                        YOUTHSTREAM MEDIA NETWORKS, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                     (IN THOUSANDS, EXCEPT PER SHARE AMOUNT)

<TABLE>
<CAPTION>

                                                                                        Year ended June 30,
                                                                              --------------------------------------
                                                                                 2001          2000          1999
                                                                              ----------    ----------    ----------
<S>                                                                           <C>           <C>           <C>
Net revenues ..............................................................   $   26,892    $   28,221    $   13,266
Operating expenses:
   Cost of sales, including depreciation of $2,299, $1,648 and $1,884,
       in 2001, 2000 and 1999, respectively ...............................       15,043        12,838         8,375
   Selling, general and administrative expenses ...........................       21,749        14,811         7,514
   Corporate expenses .....................................................        8,163         6,041         4,510
   Depreciation and amortization ..........................................        3,188         1,852           302
   Loss on impairment of assets ...........................................       10,680            --           825
                                                                              ----------    ----------    ----------
Total operating expenses ..................................................       58,823        35,542        21,526
                                                                              ----------    ----------    ----------

Loss from operations ......................................................      (31,931)       (7,321)       (8,260)

Equity loss in investment .................................................           --        (2,890)          (51)
Interest income ...........................................................        2,131         1,617           425
Other income ..............................................................           --            64            --
Interest expense ..........................................................       (3,169)       (1,000)       (1,119)
                                                                              ----------    ----------    ----------
Loss before provision for income taxes ....................................      (32,969)       (9,530)       (9,005)
Provision for income taxes ................................................          275           493           185
                                                                              ----------    ----------    ----------
Loss from continuing operations ...........................................      (33,244)      (10,023)       (9,190)
Loss from discontinued operations .........................................      (40,606)      (39,865)           --
Loss on disposal of discontinued operations ...............................     (163,953)           --            --
                                                                              ----------    ----------    ----------
Net loss ..................................................................   $ (237,803)   $  (49,888)   $   (9,190)
                                                                              ==========    ==========    ==========

Per share of common stock basic and diluted
   Loss from continuing operations ........................................   $    (1.14)   $    (0.47)   $    (0.72)
   Loss from operation of discontinued operations .........................   $    (1.38)   $    (1.89)           --
   Loss on disposal of discontinued operations ............................   $    (5.59)           --            --
                                                                              ----------    ----------    ----------
   Net loss ...............................................................   $    (8.11)   $    (2.36)   $    (0.72)
                                                                              ==========    ==========    ==========

Weighted average basic and diluted common shares outstanding ..............       29,334        21,111        12,800
                                                                              ==========    ==========    ==========
</TABLE>


                 See notes to consolidated financial statements.


                                      F-4
<PAGE>



                        YOUTHSTREAM MEDIA NETWORKS, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                        Year ended June 30,
                                                                              --------------------------------------
                                                                                 2001          2000          1999
                                                                              ----------    ----------    ----------
<S>                                                                           <C>           <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss ..................................................................   $ (237,803)   $  (49,888)   $   (9,190)
Adjustments to reconcile net loss to net cash used
in operating activities:
     Loss from discontinued operations ....................................       40,606        39,865            --
     Loss on disposal of discontinued operations ..........................      163,953
     Net change in assets and liabilities of discontinued operations ......      (12,716)      (17,440)
     Bad debt expense .....................................................           --           246            21
     Depreciation and amortization ........................................        5,487         3,500         2,186
     Loss on impairment of assets .........................................       10,680                         825
     Loss on disposal of equipment ........................................           24
     Non-cash compensation ................................................                        126            --
     Amortization of deferred financing costs .............................          750           181           174
     Amortization of original issue discount on Subordinated Notes ........           84            38            38
     Deferred rent ........................................................           13           106            --
Changes in assets and liabilities, net of acquisitions:
     Accounts receivable ..................................................        2,296        (1,562)       (1,096)
     Inventory ............................................................       (1,135)         (619)          (56)
     Prepaid expenses .....................................................          236           806          (298)
     Deposits and other current assets ....................................        2,663        (2,774)          (33)
     Accounts payable .....................................................        1,231          (999)         (265)
     Accrued employee compensation ........................................          860           334             2
     Other accrued expenses ...............................................          784          (399)          276
     Deferred revenues ....................................................        1,086           106          (168)
                                                                              ----------    ----------    ----------
Net cash used in operating activities .....................................      (20,901)      (28,373)       (7,584)

CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures ......................................................       (1,795)       (3,238)       (1,697)
Proceeds from sale of equipment ...........................................          167            --            --
Sale (purchase) of investments in marketable debt securities ..............       19,534       (25,189)           --
Other assets ..............................................................          390          (181)           --
Payment for business acquisitions, net of cash acquired ...................         (100)           --        (3,782)
Additions to deferred financing costs .....................................           --          (494)         (314)
                                                                              ----------    ----------    ----------
Net cash provided by (used in) investing activities                               18,196       (29,102)       (5,793)

CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from sale of common stock and exercise of warrants and options          127        56,027        15,358
Repurchase of common stock ................................................         (239)           --            --
Net proceeds from issuance of warrants in connection with long-term debt ..           35            --           188
Repayment of capitalized lease obligations ................................         (254)          (41)           --
Proceeds from long-term debt ..............................................          965        13,551         4,812
Repayment of long-term debt ...............................................       (1,234)         (876)       (2,206)
                                                                              ----------    ----------    ----------
Net cash (used in) provided by financing activities .......................         (600)       68,661        18,152

Net (decrease) increase in cash and equivalents ...........................       (3,305)       11,186         4,775
Cash and equivalents at beginning of year .................................       18,232         7,046         2,271
                                                                              ----------    ----------    ----------
Cash and equivalents at end of year .......................................   $   14,927    $   18,232    $    7,046
                                                                              ==========    ==========    ==========
</TABLE>



                                      F-5
<PAGE>


                        YOUTHSTREAM MEDIA NETWORKS, INC.
                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                        Year ended June 30,
                                                                              --------------------------------------
                                                                                 2001          2000          1999
                                                                              ----------    ----------    ----------
<S>                                                                            <C>           <C>           <C>
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for interest ....................................................    $ 1,506       $  1,163      $   871
Cash paid for income taxes ................................................    $   252       $    184      $   148

NONCASH FINANCING ACTIVITIES:
Issuance of warrants in connection with long-term debt ....................    $   162       $  2,926      $   552
Issuance of common stock in connection with acquisitions ..................    $ 6,814       $197,183      $ 3,783
Deferred purchase price in connection with acquisition of Invino ..........         --       $  3,500      $    --
Issuance of warrants in connection with acquisitions ......................         --       $ 18,512      $    --
</TABLE>



                 See notes to consolidated financial statements.




                                      F-6
<PAGE>


                        YOUTHSTREAM MEDIA NETWORKS, INC.
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                              Common Stock       Additional
                                                             ---------------       Paid-in    Accumulated  Treasury
                                                             Shares   Amount       Capital      Deficit      Stock        Total
                                                             ------   ------      ---------   -----------  ---------    ---------
<S>                                                          <C>      <C>         <C>         <C>               <C>     <C>
Balances at June 30, 1998 .............................      11,347   $  113      $  27,198   $ (18,768)        --      $   8,543
Issuance of warrants in connection with long-term debt         --       --              740        --           --            740
Issuance of common stock upon exercise of warrants ....       3,063       31         14,988        --           --         15,019
Issuance of common stock upon exercise of stock options         221        2            337        --           --            339
Issuance of common stock in connection with
   acquisition of Beyond the Wall .....................           7     --               33        --           --             33
Issuance of common stock in connection with
   acquisition of Trent ...............................         242        3          3,497        --           --          3,500
Issuance of common stock in connection with
   acquisition of HelloXpress .........................          17     --              250        --           --            250
Net loss ..............................................        --       --             --        (9,190)        --         (9,190)
                                                             ------   ------      ---------   ---------    ---------    ---------
Balances at June 30, 1999 .............................      14,897      149         47,043     (27,958)        --         19,234

Issuance of common stock, net of issuance costs .......       2,477       25         52,950        --           --         52,975
Issuance of common stock upon exercise of warrants ....         736        7            289        --           --            296
Issuance of common stock upon exercise of stock options         969       10          2,746        --           --          2,756
Issuance of common stock in connection with
   acquisition of CollegeWeb ..........................         109        1          2,528        --           --          2,529
Issuance of common stock in connection with
   acquisition of Invino ..............................         295        3          4,876        --           --          4,879
Additional stock options issued in connection with
   acquisition of American Passage ....................        --       --            1,062        --           --          1,062
Issuance of common stock in connection with
   acquisition of sixdegrees ..........................       3,742       37        110,678        --           --        110,715
Issuance of warrants and stock options in connection
   with acquisition of sixdegrees .....................        --       --           12,850        --           --         12,850
Issuance of common stock in connection with
   acquisition of CommonPlaces ........................       4,793       48         78,886        --           --         78,934
Issuance of stock options in connection with
   acquisition of CommonPlaces ........................        --       --            4,600        --           --          4,600
Issuance of common stock in connection with
   acquisition of Beyond the Wall .....................          13     --              126        --           --            126
Issuance of warrants in connection with long-term debt         --       --            3,346        --           --          3,346
Net loss ..............................................        --       --             --       (49,888)        --        (49,888)
                                                             ------   ------      ---------   ---------    ---------    ---------
Balances at June 30, 2000 .............................      28,031      280        321,980     (77,846)        --        244,414
Issuance of warrants in connection with long-term debt         --       --              197        --           --            197
Issuance of common stock upon exercise ................          45     --              127        --           --            127
   of stock options
Stock repurchase ......................................        --       --             --          --           (239)        (239)
Issuance of common stock in connection with
   acquisition of Teen.com ............................         944        9          5,210        --           --          5,219
Issuance of common stock in connection with
   acquisition of HelloXpress .........................          53        1            293        --           --            294
Issuance of common stock in connection with
   acquisition of Invino ..............................         958       10          1,245        --           --          1,255
Issuance of common stock in connection with
   acquisition of sixdegrees ..........................          60        1             45        --           --             46
Net loss ..............................................        --       --             --      (237,803)        --       (237,803)
                                                             ------   ------      ---------   ---------    ---------    ---------
Balances at June 30, 2001 .............................      30,091   $  301      $ 329,097   $(315,649)   $    (239)   $  13,510
                                                             ======   ======      =========   =========    =========    =========
</TABLE>




                See notes to consolidated financial statements.


                                      F-7

<PAGE>



                        YOUTHSTREAM MEDIA NETWORKS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2001



1.  ORGANIZATION AND BASIS OF PRESENTATION

The accompanying consolidated financial statements include the accounts of
YouthStream Media Networks, Inc. ("YouthStream"), and its wholly-owned
subsidiaries, (collectively, the "Company"). The Company's operations consist of
Network Event Theater, Inc. ("NET"), American Passage Media, Inc. ("American
Passage"), Campus Voice, Inc. ("Campus Voice"), Beyond the Wall, Inc. ("Beyond
the Wall"), Trent Graphics, Inc. ("Trent") and W3T.com, Inc. ("Teen.com"). In
December 2000, the Company discontinued the operations of CommonPlaces, LLC
("CommonPlaces"), sixdegrees, inc., ("sixdegrees"), CollegeWeb.com, Inc.
("CollegeWeb") and Invino Corporation ("Invino") See Note 3. - Discontinued
Operations.

YouthStream Media Networks, Inc. through its subsidiaries, is a leading
cross-platform media, marketing services and retail company that targets
teenagers and young adult ages 12 to 24. During fiscal 2001, YouthStream
reorganized into two market segments: media and retail.


2.  SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

The accompanying consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiaries. All material intercompany items and
transactions have been eliminated.

CASH AND EQUIVALENTS AND MARKETABLE DEBT SECURITIES

Cash and equivalents include all cash, demand deposits, money market accounts,
and debt instruments purchased with an original maturity of three months or
less. Marketable debt securities are debt instruments purchased with maturities
of between three and nine months. The Company's investment in debt securities,
including those held in cash equivalents, are classified as securities
held-to-maturity and are carried at amortized cost.

RESTRICTED CASH

Restricted cash includes money market accounts that are used as collateral for
letters of credit. The letters of credit are issued for security deposits on
property and equipment leases.

RECLASSIFICATIONS

Certain expenses of the media business segment previously included in selling,
general and administrative expenses and in depreciation and amortization have
been reclassified as cost of sales. Such reclassifications were $12,613,000,
$11,073,000, and $8,375,000 for the years ended June 30, 2001, 2000 and 1999,
respectively.

INVENTORIES

Inventories are stated at the lower of cost or market. Cost is determined on a
first-in, first-out basis. Inventories consist primarily of posters and related
products.

DEFERRED FINANCING COSTS

Deferred financing costs are being amortized over the term of the related debt.
Accumulated amortization of deferred financing costs at June 30, 2001 and 2000
are approximately $1,105,000 and $355,000, respectively.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost. Depreciation of property and
equipment is provided for by the straight-line method over the estimated useful
lives of the assets. These lives are estimated to be three to five years for
network theater equipment; six years for location-based media equipment, and
three to five years for furniture and office equipment. Leasehold improvements
are amortized on a straight-line basis over the shorter of the term of the
related lease or the lives of the related improvements. Expenditures for
maintenance and repairs are charged to operations as incurred.

In accordance with Financial Accounting and Standards Board ("FASB") Statement
No. 121, "Accounting for the Impairment of Long-Lived Assets to Be Disposed Of,"
the Company records impairment losses on long-lived assets used in



                                      F-8
<PAGE>


operations when events and circumstances indicate that the assets might be
impaired and the undiscounted cash flows estimated to be generated by those
assets are less than the carrying amount of those assets. During 1999, events
and circumstances indicated that certain network theater equipment and
location-based media equipment were impaired. As such, the Company wrote down
the value of such assets by approximately $825,000 to their fair value. Fair
value was based on estimated future undiscounted cash flows to be generated by
the aforementioned assets.

INTANGIBLE ASSETS

Intangible assets represent acquisition costs in excess of the net assets of
businesses acquired and a covenant not-to-compete, which are amortized on a
straight-line basis ranging from 3 to 15 years. Accumulated amortization of
intangible assets at June 30, 2001 and 2000 is approximately $2,861,000 and
$2,351,000, respectively.

It is the Company's policy to account for intangible assets at the lower of
amortized cost or estimated realizable value. As part of an ongoing review of
the valuation and amortization of intangible assets of the Company and its
subsidiaries, management assesses the carrying value of the intangible assets
periodically in relation to the operating performance and future undiscounted
cash flows of the underlying businesses.

LOSS ON IMPAIRMENT OF ASSETS

As of June 30, 2001, the Company determined that the fair market values of the
goodwill and certain other long-lived assets for Beyond the Wall, HotStamp, and
Teen.com were below their carrying values. As a result, the Company recorded an
impairment charge of approximately $5,930,000. Additionally, the Company
determined that it was unlikely that $4,750,000 of a prepaid marketing asset
would ever be utilized. Such amount was also recorded as a charge as of June 30,
2001. The aforementioned charges have been recorded as a loss on impairment of
assets in the statement of operations for the year ended June 30, 2001.

REVENUE RECOGNITION

The Company's primary source of revenue is derived from the sale of advertising
space in media, which is owned either by the Company or by third parties and by
the sale of marketing services. Revenue is generally recognized in the month of
media publication and in the case of marketing services, the month such services
are provided. Retail revenue is derived from the sale of merchandise to
consumers on college campuses and stores. Retail revenue is recognized at the
time of sale to the consumer.

ADVERTISING AND PROMOTION COSTS

The Company expenses advertising costs as incurred. Advertising expense from
continuing operations for the years ended June 30, 2001, 2000 and 1999 were
approximately $851,000, $263,000 and $459,000, respectively.

INCOME TAXES

The Company accounts for income taxes in accordance with FASB Statement No. 109,
"Accounting for Income Taxes. Under this method, deferred income taxes are
provided for differences between the carrying amounts of the Company's assets
and liabilities for financial reporting purposes and the amounts used for income
tax purposes.

NET LOSS PER SHARE

The Company calculates net loss per share as required by SFAS No. 128, "Earnings
per Share." Basic earnings per share excludes any dilution for common stock
equivalents and is computed on the basis of net loss divided by the weighted
average number of common shares outstanding during the period. Diluted earnings
per share reflects the potential dilution that could occur if options or other
securities or contracts entitling the holder to acquire shares of common stock
were exercised or converted, resulting in the issuance of additional shares of
common stock that would then share in earnings. However, diluted earnings per
share does not consider such dilution if its effect would be antidilutive.
Certain options and warrants that are currently antidilutive may be dilutive in
the future.

STOCK-BASED COMPENSATION

The Company generally grants stock options to employees for a fixed number of
shares with an exercise price equal to or greater than the fair value of the
shares at the date of grant. The Company accounts for stock option grants in
accordance with Accounting Principles Board ("APB") Opinion No. 25, "Accounting
for Stock Issued to Employees", and, accordingly, recognizes compensation
expense only if the fair value of the underlying common stock exceeds the
exercise price of the stock option on the date of grant. The Company believes
the alternative fair value accounting provided for under FASB Statement No. 123,
"Accounting for Stock-Based Compensation" ("SFAS No. 123") requires the use of
option valuation models that were not developed for use in valuing employee
stock options. As permitted by SFAS No. 123, the Company



                                      F-9
<PAGE>


continues to account for stock-based compensation in accordance with APB Opinion
No. 25 and has elected the pro forma disclosure alternative of SFAS No. 123.

USE OF ESTIMATES

The preparation of the financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates.

RISKS AND UNCERTAINTIES

Financial instruments that potentially subject the Company to concentrations of
credit risk consist primarily of accounts receivable. The Company routinely
assesses the financial strength of its customers and requires collateral or
other security to support customer receivables when necessary. Credit losses are
provided for in the consolidated financial statements in the form of an
allowance for doubtful accounts. Management believes the Company has ample
coverage for bad debt and will continue to review the collectibility of its
receivables.

IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

In June 2001, the FASB issued SFAS No. 141, "Business Combinations" and No. 142,
"Goodwill and Other Intangible Assets" ("SFAS 142"), effective for fiscal years
beginning after December 15, 2001, with early adoptions permitted for companies
with fiscal years beginning after March 15, 2001. Under the new rules, goodwill
and intangible assets deemed to have indefinite lives will no longer be
amortized but will be subject to annual impairment tests in accordance with the
Statements. Other intangible assets will continue to be amortized over their
useful lives.

The Company is currently evaluating its goodwill and other intangible assets in
relation to the provisions of SFAS 142 to determine the impact, if any, the
adoption of SFAS 142 will have on its results of operations. The Company will
perform the first of the required impairment tests of goodwill and other
intangible assets, and has not yet determined what the effect of these tests
will be on the earnings and financial position of the Company.


3.  DISCONTINUED OPERATIONS

In December 2000, the Company announced its decision to discontinue the online
segment, including the operations of its sixdegrees subsidiary and exit its
Application Service Provider ("ASP") business. The ASP business included the
technology that was acquired and further developed by CommonPlaces, CollegeWeb
and Invino. The Company determined that the ASP business was not aligned with
its long-term vision and strategy. The Company shut down its sixdegrees website
on December 30, 2000, and final disposal of the ASP business occurred prior to
June 30, 2001. In connection with the discontinuance of these businesses, the
Company incurred a one-time charge of $164 million, related primarily to the
write-off of goodwill, and also including other net assets and an accrual for
estimated losses during the phase-out period. The discontinuation of sixdegrees
and the disposal of the ASP business represent the disposal of a business
segment under Accounting Principles Board ("APB") Opinion No. 30. Accordingly,
results of these operations have been classified as discontinued and prior
periods have been restated.

Net revenues and losses from discontinued operations are as follows (in
thousands):

                                                   Year ended      Year ended
                                                  June 30, 2001   June 30, 2000
                                                  -------------   -------------
Net revenues .....................................   $     398       $    818
                                                     =========       ========
Loss from discontinued operations ................   $ (40,606)      $(39,865)
Loss on disposal of discontinued operations ......    (163,953)            --
                                                     ---------       --------
Net loss from discontinued operations ............   $(204,559)      $(39,865)
                                                     =========       ========

As of June 30, 2001, the Company has accrued $3,263,000 for the liabilities
remaining from its online businesses. The accrual covers severance, lease
payments and other miscellaneous expenses.



                                      F-10
<PAGE>


4.  CASH AND EQUIVALENTS, MARKETABLE DEBT SECURITIES AND RESTRICTED CASH

The following is a summary of the Company's cash and held-to-maturity securities
at June 30, 2001, which are classified as either cash equivalents or marketable
debt securities based on a maturity of less than or more than three months,
respectively, or restricted cash (in thousands):

<TABLE>
<CAPTION>
                                                                          Gross         Gross       Estimated
                                                                        Unrealized    Unrealized     Market
                                                            Cost          Gains        Losses         Value
                                                           -------      ----------    ----------    ---------
<S>                                                        <C>             <C>            <C>        <C>
Cash and Equivalents:
Cash ....................................................  $12,065           --           --         $12,065
Mortgage backed securities ..............................    2,862         $ 11           --           2,873
                                                           -------         ----          ----        -------
Total Cash and Equivalents ..............................  $14,927         $ 11                      $14,938
                                                           =======         ====          ====        =======


Marketable Debt Securities:
Government obligations ..................................  $ 1,532         $ 10           --         $ 1,542
Corporate obligations ...................................    4,117           --           --           4,117
Commercial paper ........................................        6           --           --               6
                                                           -------         ----          ----        -------
Total Marketable Debt Securities ........................  $ 5,655         $ 10           --         $ 5,665
                                                           =======         ====          ====        =======

Restricted Cash (Restriction Expiring August 2002) ......  $ 1,328           --           --         $ 1,328
                                                           =======         ====          ====        =======
Total ...................................................  $21,910         $ 21           --         $21,931
                                                           =======         ====          ====        =======
</TABLE>

5.  ACQUISITIONS

TRENT

In June 1999, the Company acquired Trent pursuant to a merger agreement (the
"Merger Agreement"). Trent sells posters and other products at sales events at
junior and four-year colleges, high schools, at retail stores and other
locations and over the Internet. The purchase price consisted of $3.5 million in
cash and 242,003 shares of the Company's common stock valued at $3.5 million, or
$14.46 per share, the then current market price. In addition, if Trent's EBITDA
(as defined in the Merger Agreement) for the two years ending June 30, 2001
exceeded certain targets, the Company was obligated to pay to the former Trent
stockholders up to an additional $600,000 in cash and additional shares of the
Company's common stock valued at $600,000. In December 2000, the Company amended
its agreement with the previous owners of Trent to modify the targets related to
the aforementioned earnouts. The modified earnouts were treated as compensation
expense rather than additional purchase price due to the nature of the
modifications. As of June 30, 2001, the Company has accrued an additional
$991,000 relating to the modified earnouts. The aggregate purchase price of
$7,060,000, including acquisition costs, was recorded as excess of cost over net
assets acquired.

HELLOXPRESS

In June 1999, the Company acquired certain assets and liabilities of HelloXpress
USA, Inc. ("HelloXpress"). The purchase price consisted of $300,000 in cash,
17,242 shares of the Company's common stock valued at $250,000, or $14.50 per
share, the then current market price, and the forgiveness of amounts due to the
Company of $125,000. In addition, the former stockholders of HelloXpress
received an additional $45,000 in cash and shares of the Company's common stock
valued at $200,000 in September 2000. The aggregate purchase price of $936,000,
including acquisition costs, was recorded as excess of cost over net assets
acquired and a portion was allocated to a covenant not-to-compete.

COLLEGEWEB

In August 1999, the Company acquired CollegeWeb pursuant to a merger agreement
between the Company and CollegeWeb. The purchase price consisted of 108,971
shares of the Company's common stock, valued at $2,529,000, or approximately
$23.22 per share, the then current market price. The Company licensed
CollegeWeb's technology to CommonPlaces. The aggregate purchase price of
$2,738,000, including acquisition costs, was recorded as excess of cost over net
assets acquired. Effective December 2000, the Company discontinued the
CollegeWeb operations. (See Note 3. Discontinued Operations)



                                      F-11
<PAGE>


INVINO

In October 1999, the Company acquired Invino pursuant to a merger agreement
between the Company and Invino. The purchase price aggregating $9,000,000 is
payable in the Company's common stock, of which $3,486,000 (167,358 shares) was
paid at closing, based on the 30-day average share price prior to the payment
date. The balance of the purchase price is payable in the Company's common stock
in quarterly installments of $500,000 through September 30, 2000 and quarterly
installments of $375,000 from December 31, 2000 through December 31, 2002.
Through June 30, 2001, the Company issued an additional 1,085,731 shares valued
at approximately $2,648,000 in connection with the quarterly installments. The
aggregate purchase price was recorded in October 1999, and the deferred purchase
price included in the accompanying balance sheet represents the unpaid portion.
For accounting purposes, the value of the shares issued and to be issued has
been and will be determined on the three-day average trading price one day
before and one day after the date of issuance. Any differences between the use
of the 30-day and three-day average trading prices will be accounted for as an
adjustment to the purchase price. The aggregate purchase price of $8,594,000,
including acquisition costs, was recorded as excess of cost over net assets
acquired. Effective December 2000, the Company discontinued the Invino
operations. (See Note 3. Discontinued Operations)

SIXDEGREES

In January 2000, the Company acquired sixdegrees pursuant to a merger agreement
between the Company and sixdegrees. The Company issued 2,742,536 shares of
common stock and 999,957 shares of convertible preferred stock valued at
$110,715,000, or approximately $29.583 per share, the current three-day average
price per share when the merger was announced in December 1999. The convertible
preferred stock was converted into common stock in March 2000. The Company also
exchanged 640,979 of its options and warrants for 7,722,643 of sixdegrees'
options and warrants valued at approximately $12,850,000. The aggregate purchase
price of $125,369,000, including acquisition costs, exceeded the net assets
acquired by $114,727,000, which was recorded as excess of cost over net assets
acquired. Effective December 2000, the Company discontinued the operations of
sixdegrees. (See Note 3. Discontinued Operations).

COMMONPLACES

In November 1998, the Company acquired 5,000,000 common units in CommonPlaces in
exchange for providing media and marketing services having an aggregate value of
$15,000,000 over a four year period commencing upon the initial public launch
campaign promoting CommonPlaces' business, but not later than August 31, 1999.
Twenty-five percent of the common units initially acquired by the Company, or
1,250,000 common units, were not subject to vesting and no additional
performance of services by the Company was necessary with respect to those
units.

The Company did not assign a value to the initial 1,250,000 common units that
vested immediately because of the start-up nature of CommonPlaces' business and
the related uncertainty surrounding it. It was the Company's intention to record
an investment proportionate to the cost of media and marketing services provided
on an ongoing basis related to its $15,000,000 four-year commitment. This
investment in CommonPlaces was accounted for using the equity method, under
which the Company's share of losses of CommonPlaces was reflected in the
accompanying statement of operations as on equity loss in investment.

For the period November 1998 through February 28, 2000, the Company provided
$2,941,000 in media and marketing services to CommonPlaces. The Company's share
of CommonPlaces' losses for the period from November 1998 through June 30, 1999
and July 1, 1999 through February 28, 2000 was approximately $2,300,000 and
$7,488,000, respectively. The Company has limited the recognition of
CommonPlaces' losses in its statement of operations for the period from July 1,
1999 through February 28, 2000 and the period from November 1998 to June 30,
1999 to $2,890,000 and $51,000, respectively, because it was not required to
fund CommonPlaces' losses or to make additional capital contributions. For the
period from July 1, 1999 through February 28, 2000, the Company recognized
approximately $1,741,000 in license fee income and CommonPlaces recognized
$1,741,000 in license fee expense.

In February 2000, CommonPlaces unit holders, excluding the Company, received
4,792,867 shares of the Company's common stock, valued at $78,934,000, or
approximately $16.47 per share, the current three-day average price per share
when the merger was first announced in June 1999. The Company issued 1,158,223
of its common stock options in exchange for 1,301,374 options in CommonPlaces'
units valued at approximately $4,600,000. The aggregate purchase price of
$92,276,000, including acquisition costs and the funding of CommonPlaces
operating expenses of $7,463,000 through the date of the merger, exceeded the
net assets acquired by $92,373,000 which was recorded as excess of cost over net
assets acquired. Effective December 2000, the Company discontinued the
operations of CommonPlaces. (See Note 3. Discontinued Operations)



                                      F-12
<PAGE>


TEEN.COM

In July 2000, the Company acquired Teen.com pursuant to a merger agreement among
the Company, a wholly-owned subsidiary of the Company, and Teen.com. Teen.com is
a family-friendly Web destination for teens and is ranked as one of the top
websites visited by 13 to 19 year-olds. The purchase price consisted of 944,000
shares of the Company's common stock, including 50,000 shares issued to the
broker, valued at approximately $5,200,000 or approximately $5.53 per share, the
then current market price.

The aforementioned acquisitions have been accounted for using the purchase
method of accounting. Accordingly, the purchase price of each of the
acquisitions has been allocated to the assets acquired and the liabilities
assumed based on their fair values at the respective date of each acquisition.
Included in intangible assets is the excess of cost over the fair value of
assets acquired and liabilities assumed. The results of operations of the
businesses acquired are included in the Company's consolidated results of
operations from the respective dates of acquisition.

The following unaudited pro forma information is presented as if the Company had
completed the acquisition of Teen.com as of July 1, 2001 and 2000, respectively,
and excludes those acquisitions that were discontinued (in thousands):

<TABLE>
<CAPTION>
                                                                              Year ended June 30
                                                                           ------------------------
                                                                            2001             2000
                                                                           --------        --------
<S>                                                                        <C>             <C>
Net revenue .............................................................  $ 26,962        $ 29,584
Loss from continuing operations .........................................  $(33,273)       $(11,752)
Loss from continuing operations per basic and diluted common share ......  $  (1.13)       $  (0.53)

Weighted average common shares outstanding - basic and diluted ..........    29,368          22,055
</TABLE>

The pro forma information above is not necessarily indicative of the results of
operations that would have occurred had the acquisition been made at the
beginning of the respective periods.

In connection with the acquisitions of Invino and sixdegrees, the Company issued
additional shares of common stock during the twelve months ended June 30, 2001.


6.  LONG-TERM DEBT

Long-term debt consists of the following (in thousands):
<TABLE>
<CAPTION>
                                                                                    Year ended June 30
                                                                                  -----------------------
                                                                                   2001            2000
                                                                                  -------         -------
<S>                                                                               <C>            <C>
Note Payable to Bank  (A) ......................................................  $ 1,072        $  1,739
Subordinated Notes - Private Placement (B) .....................................    5,000           5,000
Note Payable to Finance Company (C) ............................................    1,169           1,768
Subordinated Notes - Private Placement (D) .....................................   12,000          12,000
Subordinated Notes - Private Placement (E) .....................................    1,000               -
Other ..........................................................................        6               9
                                                                                  -------         -------
                                                                                   20,247          20,516
Less unamortized original issue discount attributed to subordinated notes ......      448             532
                                                                                  -------         -------
                                                                                   19,799          19,984
Less current portion ...........................................................    1,169           1,275
                                                                                  -------         -------
                                                                                  $18,630         $18,709
                                                                                  =======         =======
</TABLE>

(A) This loan is secured by all of the assets of Campus Voice, Beyond the Wall
and American Passage (the "Borrowers") and is guaranteed by the Company. This
loan is payable in equal monthly installments, commencing in February 1998, over
a maximum of six years. Interest is payable monthly at a rate of interest of 275
basis points above LIBOR for U.S. dollar deposits of one-month maturity.

The Borrowers are also party to an interest rate exchange agreement originally
converting $3.0 million of the aforementioned floating rate debt to a fixed
rate. The balance of the interest rate agreement at June 30, 2001 was $722,222.
Under the interest rate exchange agreement, the Borrowers are required to pay
interest at a fixed rate of 9.11% on the notional amount covered by the interest
rate exchange agreement. In return, the Company receives interest payments on
the same notional amount at the prevailing LIBOR rate plus 275 basis points. The
interest rate exchange agreement terminates in June 2002. The fair value of the
interest rate exchange agreement at June 30, 2001 was immaterial.



                                      F-13
<PAGE>


The Company was in violation of certain of its covenants as of June 30, 2001.
The Company has obtained a waiver from the bank through March 31, 2002, and
management believes that the Company will be in compliance after March 31, 2002.

(B) In July 1998, the Company issued subordinated notes to accredited investors
in the aggregate amount of $5,000,000 less an original discount of $188,000.
These notes bear interest at 11% per annum and are due in July 2003. In
connection with the issuance of the subordinated notes, the Company issued
375,000 warrants to the accredited investors for $188,000, and 150,000 warrants
to the placement agent. Each warrant, which expires in July 2003, entitles the
holder to purchase one share of the Company's common stock for $4.125, the
market price of the Company's common stock at the date of issuance. Based on an
independent appraisal, the 525,000 warrants were valued at $740,000. The value
of the warrants and closing costs of $314,000 have been recorded as deferred
financing costs and are being amortized over the term of the subordinated notes.
The original issue discount of $188,000 is also being amortized over the term of
the related debt.

(C) In March 2000, the Company issued a note to a finance company in the amount
of $1,971,000. The note bears interest at the rate of 11.95% per annum and is
payable in 36 equal monthly payments commencing in March 2000. The note is
secured by certain equipment owned by the Company.

(D) In June 2000, the Company issued a subordinated note to an accredited
investor in the amount of $12,000,000, less an original issue discount of
$420,000. The note bears interest at 11% per annum and is due in June 2005. In
connection with the issuance of the subordinated note, the Company issued
1,020,000 warrants to an accredited investor in exchange for $420,000. Each
warrant, which expires in June 2005, entitles the holder to purchase one share
of the Company's common stock for $5.9375, the market price of the Company's
common stock at the date of issuance. Based on an independent appraisal, the
1,020,000 warrants were valued at $3,346,000. The value of the warrants and
closing costs of $494,000 were recorded as deferred financing costs and are
being amortized over the term of the subordinated note. The original issue
discount of $420,000 is being amortized over the term of the related debt.

(E) In July 2000, the Company issued a subordinated note to an accredited
investor in the amount of $1,000,000, less an original issue discount of
$35,000. The note bears interest at 11% per annum and is due in July 2005. In
connection with the issuance of the subordinated note, the Company issued 60,000
warrants to an accredited investor in exchange for $35,000. Each warrant, which
expires in July 2005, entitles the holder to purchase one share of the Company's
common stock for $3.75, the market price of the Company's common stock at the
date of issuance. Based on an independent appraisal, the 60,000 warrants were
valued at $197,000. The value of the warrants was recorded as deferred financing
costs and is being amortized over the term of the subordinated note. The
original issue discount of $35,000 is being amortized over the term of the
related debt.

At June 30, 2000, the aggregate amounts of long-term debt due during the next
five years are as follows (in thousands):

          Year ending June 30
          -------------------
                2002 ................  $ 1,169
                2003 ................      904
                2004 ................    5,174
                2005 ................   13,000
                                       -------
                                       $20,247
                                       =======

PROPERTY AND EQUIPMENT

Property and equipment consists of the following (in thousands):

                                                                 June 30
                                                        ----------------------
                                                          2001           2000
                                                        -------        -------
Network theater equipment ............................  $ 4,051         $4,486
Location based media equipment .......................      882            210
Furniture and office equipment .......................    6,278          6,099
Leasehold improvements ...............................      775            346
Building .............................................      488            488
Land .................................................      130            130
                                                        -------        -------
                                                         12,604         11,759
Less accumulated amortization and depreciation .......   (5,787)        (3,594)
                                                        -------        -------
                                                        $ 6,817        $ 8,165
                                                        =======        =======



                                      F-14
<PAGE>


Property and equipment include assets under capital leases aggregating
approximately $189,000 at June 30, 2001 and 2000. The accumulated amortization
related to assets under capital leases is approximately $96,000 and $33,000 at
June 30, 2001 and 2000, respectively.


8.  INCOME TAXES

At June 30, 2001, the Company had a net operating loss carryforward for income
tax purposes of approximately $82,347,000 that expires from 2013 through 2021.
The use of this net operating loss in future years may be restricted under
Section 382 of the Internal Revenue Code. For financial reporting purposes, a
valuation allowance of approximately $30,701,000 has been recognized to offset
the net deferred tax asset principally related to this carryforward. The
valuation allowance increased by approximately $9,803,000 and $11,674,000 for
the years ended June 30, 2001 and 2000, respectively.

Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components of
the Company's deferred tax assets as of June 30, 2001 are as follows: (in
thousands)

                                                               June 30
                                                       ----------------------
                                                         2001           2000
                                                       -------        -------
     Net operating loss carryforwards ...............  $32,856        $20,492
     Other ..........................................   (2,155)           406
                                                       -------        -------
     Total deferred tax assets ......................   30,701         20,898
     Valuation allowance ............................  (30,701)       (20,898)
                                                       -------        -------
     Net deferred tax asset .........................  $    --        $    --
                                                       =======        =======

No federal tax provision has been provided for the years ended at June 30, 2001
and 2000 due to the significant losses incurred to date. A current state tax
provision has been provided for at June 30, 2001 and 2000 in the amount of
$275,000 and $493,000 respectively. These taxes are primarily based on net
assets and net revenues.


9.  STOCKHOLDERS' EQUITY

In December 1995, the Company granted to certain consultants an option to
purchase 552,560 shares of common stock at an exercise price of $1.58 per share,
which expires in December 2005. The Company, in years ended June 30, 2000 and
1999 respectively, issued 460,280 and 92,000 shares of the common stock in
connection with the exercise of such options.

The Company issued 2,645,000 warrants at the time of its initial public offering
in April 1996. Each of the warrants entitled the registered holder to purchase
one share of the Company's common stock for $5.00, subject to adjustment in
certain circumstances, at any time until April 2, 2001. In December 1997, the
Company issued 12,000 shares of common stock upon exercise of warrants. In
January 1999, the remaining 2,633,000 warrants were exercised resulting in net
proceeds to the Company of approximately $13,200,000.

In connection with the Company's initial public offering in April 1996, the
Company issued 230,000 warrants to the underwriter. Each warrant entitled the
holder to purchase one share of the Company's stock for $8.25 and an additional
warrant for $.165. Each additional warrant entitled the holder to purchase one
share of the Company's common stock for $8.25. All warrants expire in April
2002. Through June 30, 2000, 228,088 warrants and 227,088 additional warrants
were exercised resulting in net proceeds to the Company of $2,146,000.
Approximately 198,000 of the additional warrants were exercised in cashless
transactions.

In connection with the sale of 1,015,873 shares of the Company's common stock in
June 1997, the Company issued 150,000 warrants to an investment bank. Such
warrants have an exercise price of $4.50 and expired in December 2000. In
January and February 1999, the Company issued 112,562 shares of its common stock
in exchange for these warrants in cashless transactions.



                                      F-15
<PAGE>


In December 1997 and 1998, the Company granted to a public relations firm, an
aggregate of 400,000 warrants to purchase shares of the Company's common stock
at an exercise price of $5.00 per share. In January 1999, the Company issued
71,193 shares of its common stock upon the cashless exercise of 100,000
warrants. In December 1999, the Company issued 249,791 shares of its common
stock upon cashless exercise of 300,000 warrants.

In connection with certain earnout contingencies related to the American Passage
acquisition in September 1996, the Company issued 75,000 options, each of which
entitled the holder to purchase one share of the Company's common stock for
$2.627. The value of such options of $1,062,000 was recorded as additional
purchase price. In November 1999, the Company issued 75,000 shares of its common
stock in connection with the exercise of such options.

In connection with the issuance of Subordinated Notes in July 1998, the Company
issued 525,000 warrants to accredited investors and the placement agent. Each
warrant, which expires in July 2003, entitles the holder to purchase one share
of the Company's common stock for $4.125. During July and September 1999, the
warrants were exercised in a cashless transaction resulting in the issuance of
450,568 shares of the Company's common stock.

In August 1999, the Company sold 1,219,521 shares of its common stock for
$25,000,000 in a private placement. In conjunction with the private placement,
the Company issued to the placement agent a warrant to purchase 36,585 shares of
the Company's common stock at $23.50 per share, the then current market price.
The Company incurred approximately $1,500,000 of fees and related expenses in
this transaction.

In December 1999, the Company sold 1,257,400 shares of its common stock for
$31,435,000 in a private placement. In conjunction with the private placement,
the Company issued to the placement agent a warrant to purchase 37,722 shares of
the Company's common stock at $25.00 per share, the then current market price.
The Company incurred approximately $1,900,000 of fees and related expenses in
this transaction.

In connection with an acquisition, the Company issued 13,332 shares of the
Company's common stock, in April 2000, to the former owners of Beyond the Wall
valued at approximately $126,000.

In connection with the issuance of Subordinated Notes in June 2000, the Company
issued 1,020,000 warrants to accredited investors and the placement agent. Each
warrant, which expires in June 2005, entitles the holder to purchase one share
of the Company's common stock for $5.9375.

For the twelve months ended June 30, 2001, options were exercised resulting in
the issuance of 45,848 shares of common stock and net proceeds to the Company of
$127,000.

In May 2001, the Board of Directors authorized the Company to make open market
purchases of the Company's common stock aggregating up to $2 million. As of June
30, 2001, the Company purchased, on the open market, 143,000 shares at a cost of
$239,000.

Securities for issuance of common stock excluded from diluted earnings per share
due to their antidilutive effect are as follows:

                                                     As of June 30
                                        -------------------------------------
                                          2001           2000          1999
                                        ---------      ---------    ---------
Stock options ......................... 3,942,021      3,595,547    1,249,000
Common stock purchase warrants ........ 1,462,000      1,402,000      890,000






                                      F-16
<PAGE>


10.  STOCK OPTION PLANS

In February 2000, the Company adopted the YouthStream 2000 Stock Option Plan
(the "2000 Plan") in order to grant employees providing services to the Company
incentive stock options. The 2000 Plan allows for the granting of options to
purchase up to 5,000,000 shares of the Company's common stock. All option plans
of the Company in existence at the formation of the 2000 Plan were merged into
the 2000 Plan. The terms of the options were not changed upon merging the Plans.
The exercise price of the options granted was at fair market value on the date
of the grant. Options generally vest over three years.

In October 2000, the Company granted a certain executive of the Company a
non-qualified option to purchase up to 100,000 shares of the Company's common
stock. The exercise price of the options granted was at fair market value on the
date of the grant. The option vests over two years.

 The following table summarizes the Option Plan.

<TABLE>
<CAPTION>
                                                                                Weighted
                                                                                 Average
                                                                Shares        Exercise Price
                                                             ----------       --------------
<S>                                                           <C>                <C>
Options outstanding at June 30, 1998 .......................    529,000          $  4.39
Options granted ............................................    370,200            11.44
Options canceled ...........................................    (55,833)            6.10
Options exercised ..........................................    (55,000)            3.53
                                                             ----------          -------
Options outstanding at June 30, 1999 .......................    788,367          $  7.64
Options granted ............................................  3,985,255            14.35
Options canceled ...........................................   (758,389)           15.93
Options exercised ..........................................   (419,686)            4.17
                                                             ----------          -------
Options outstanding at June 30, 2000 .......................  3,595,547          $ 13.70
Options granted ............................................  2,123,820             2.35
Options canceled ........................................... (1,731,498)           15.10
Options exercised ..........................................    (45,848)            2.77
                                                             ----------          -------
Options outstanding at June 30, 2001 .......................  3,942,021          $  7.09
                                                             ==========          =======

Options exercisable at June 30, 2001 .......................  1,483,260
                                                             ==========
Options exercisable at June 30, 2000 .......................    629,939
                                                             ==========
Options available for future grant at June 30, 2001 ........    930,102
                                                             ==========
</TABLE>

Information regarding the options outstanding under the Option Plan at June 30,
2001 is as follows:

<TABLE>
<CAPTION>
                         Number of        Weighted-    Weighted-
  Exercise                Options          Average      Average                              Average
   Price                 Currently        Exercise    Contractual           Number          Exercise
   Range                Outstanding         Price        Life            Exercisable          Price
------------            -----------       ---------   -----------        -----------         -------
<S>                      <C>               <C>         <C>                <C>                <C>
$0.78-1.09                 137,500         $ 0.93      9.7 years                 --              --
$1.25-1.88               1,375,929         $ 1.60      9.3 years            143,575          $ 1.84
$1.91-2.63                     557         $ 1.91      7.7 years                557          $ 1.91
$3.00-4.16                 660,591         $ 3.50      8.6 years            334,620          $ 3.50
$4.69-7.00                 891,456         $ 5.87      8.5 years            494,527          $ 5.76
$7.25-10.84                 62,322         $ 9.12      8.1 years             54,470          $ 9.31
$11.50-16.94               206,218         $13.00      7.7 years            152,522          $12.99
$17.38-25.75               294,098         $19.84      8.3 years            147,986          $20.00
$26.13-28.75               313,350         $28.69      8.7 years            155,003          $28.75
                         ---------                                        ---------          ------
                         3,942,021                                        1,483,260          $ 9.57
                         =========                                        =========          ======
</TABLE>




                                      F-17
<PAGE>


Pro forma information regarding net loss per share is required by SFAS 123, and
has been determined as if the Company had accounted for its employee stock
options under the fair value method of SFAS 123. The fair value for these
options was estimated at the date of grant using a Black-Scholes option-pricing
model with the following weighted-average assumptions for June 30, 2001 and
2000:

                                                            June 30
                                              ----------------------------------
Assumption                                       2001         2000         1999
----------------------------------------      ---------     -------      -------
Risk-free interest rate .....................     4.99%       6.41%        5.08%
Dividend yield ..............................        0%          0%           0%
Volatility factor of the expected market
  price of the Company's common stock .......     1.223         .90         1.09
Average life ................................ 2.4 years     3 years      3 years

The Black-Scholes option valuation model was developed for use in estimating the
fair value of traded options that have no vesting restrictions and are fully
transferable. In addition, option valuation models require the input of highly
subjective assumptions including the expected stock price volatility. Because
the Company's employee stock options have characteristics significantly
different from those of traded options, and because changes in the subjective
input assumptions can materially affect the fair value estimate, in management's
opinion, the existing models do not necessarily provide a reliable single
measure of the fair value of it employee stock options.

For purposes of pro forma disclosures, the estimated fair value of the options
is amortized to expense over the vesting period of the options. Had compensation
cost for the Company's Plan been determined based upon the fair value at the
grant date for awards under the Plan consistent with the methodology prescribed
under Financial Accounting Standards Board Statement No. 123, "Accounting for
Stock-Based Compensation," the Company's net loss and loss per share would have
been increased by approximately $7,890,000 or $0.27 per share and $2,659,000, or
$0.13 per share for the years ended June 30, 2001 and 2000, respectively.

The weighted average fair value of options granted during the years ended June
30, 2001, and 2000 was $1.49 and $8.10, respectively.


11.  COMMITMENTS AND CONTINGENCIES

LEASES

The Company is obligated under capital leases for certain computer and office
equipment that expire at various dates through September 2004 with interest
ranging from 12% to 25%. Future minimum lease payments relating to office space
under noncancelable operating leases and future minimum capital lease payments
as of June 30, 2001 are as follows (in thousands):

<TABLE>
<CAPTION>
                                                                         Capital      Operating
                                                                         Leases        Leases
                                                                         ------       ---------
<S>                                                                      <C>            <C>
Year ending June 30:
   2002 ................................................................ $1,015         $2,636
   2003 ................................................................    165          2,120
   2004 ................................................................     35          1,436
   2005 ................................................................      7          1,007
   2006 ................................................................     --            586
   Thereafter ..........................................................     --             --
                                                                         ------         ------
Total minimum lease payments ...........................................  1,222         $7,785
                                                                                        ======
   Less amount representing interest ...................................   (121)
                                                                         ------
   Present value of net minimum capital lease payments .................  1,101
   Less current installments of obligations under capital lease ........    911
                                                                         ------
   Obligations under capital leases, net of current installments ....... $  190
                                                                         ======
</TABLE>

Rent expense from continuing operations was approximately $1,850,000, $1,281,000
and $669,000 for the years ended June 30, 2001, 2000 and 1999, respectively. At
December 31, 2001, approximately $865,000 and $185,000 of short-term capital
lease obligations and long-term capital lease obligations, respectively, were
reclassified to current and long term liabilities of



                                      F-18
<PAGE>


discontinued operations. These capital leases relate to obligations for which
the Company is still liable, although the assets were written off as part of the
discontinued operations of sixdegrees.

LITIGATION

In the normal course of business, the Company is subject to certain claims and
litigation, including unasserted claims. The Company is of the opinion that,
based on information presently available, such legal matters will not have a
material adverse effect on the financial position, results of the operations or
cash flows of the Company.


12.  401(K) PLAN

During 1997, the Company established a 401(k) Plan (the "Plan") for the benefit
of all eligible employees. Eligible participants under this Plan are defined as
all full-time employees with one year of service. All eligible participants may
elect to contribute a portion of their compensation to the Plan subject to
Internal Revenue Service limitations. The Company may make discretionary
matching contributions to the Plan, subject to board approval. For the years
ended June 30, 2001, 2000 and 1999, the amount of this matching expense was
approximately $163,000, $74,000 and $41,000, respectively.


13.  SEGMENT INFORMATION

During the second quarter of fiscal year 2001, in connection with the decision
to discontinue the Company's online segment, the Company revised its reporting
of the remaining businesses. The Company's segments are now media and retail.
The media segment represents the Company's media, marketing and promotional
services provided to advertisers by NET, American Passage, Campus Voice, Beyond
the Wall and Teen.com. The retail segment consists of on-campus and retail store
poster sales provided by Trent. The segments for fiscal 2000 have been restated
to reflect the Company's internal reorganization (in thousands). There was no
retail segment in fiscal 1999.

<TABLE>
<CAPTION>
                                           Year ended                     Year ended
                                         June 30, 2001                  June 30, 2000
                                 --------------------------------------------------------------
                                    Media    Retail     Total      Media    Retail     Total
                                  --------  --------   --------  --------   -------   --------
<S>                               <C>       <C>        <C>       <C>        <C>       <C>
Net revenues ...................  $ 16,865  $ 10,027   $ 26,892  $ 20,560   $ 7,661   $ 28,221
Depreciation and amortization ..     4,804       683      5,487     2,930       570      3,500

Loss from operations ...........   (28,810)   (3,121)   (31,931)   (6,761)     (560)    (7,321)
                                  ========  ========   ========  ========   =======   ========
Capital expenditures ...........     1,097       698      1,795     1,968     1,270      3,238
                                 ==============================================================

<CAPTION>
                                              June 30, 2001                                  June 30, 2000
                                ---------------------------------------        ------------------------------------------
                                  Media           Retail          Total          Media           Retail          Total
                                --------        --------       --------        --------         -------       -----------
<S>                             <C>             <C>            <C>             <C>              <C>           <C>
Identifiable assets ..........  $ 37,879        $ 10,827       $ 48,706        $ 75,481         $ 9,873       $ 85,354(a)
</TABLE>

(a) June 30, 2000 excludes net non-current assets of discontinued operations.









                                      F-19
<PAGE>


14.  QUARTERLY RESULTS (UNAUDITED)

The following is a summary of the quarterly results of operations for the two
years ended June 30, 2001 (in thousands except per share data):

<TABLE>
<CAPTION>
                                                               June 30,      March 31,    December      September
                                                                 2001          2001       31, 2000      30, 2000
                                                              ---------      --------    ---------      --------
<S>                                                           <C>            <C>         <C>            <C>
Net revenues ...............................................  $   3,269      $  5,765    $   7,291      $ 10,567
Income (loss) from operations ..............................    (19,662)       (5,238)      (4,910)       (2,121)
Loss before provision for income taxes .....................    (20,015)       (5,641)      (5,168)       (2,145)
Loss from continuing operations ............................    (19,869)       (5,762)      (5,240)       (2,373)
Loss from discontinued operations ..........................         --            --      (15,767)      (24,839)
Income (loss) on disposal of discontinued operations .......      1,018            --     (164,971)           --

Net loss ...................................................  $ (18,851)     $ (5,762)   $(185,978)     $(27,212)
                                                              =========      ========    =========      ========
Per share of common stock basic and diluted
    Loss from continuing operations ........................  $   (0.67)     $  (0.20)   $   (0.18)     $  (0.08)
    Loss from discontinued operations ......................         --            --        (0.54)        (0.86)
    Loss on disposal of discontinued operations ............       0.03            --        (5.66)           --
                                                              ---------      --------    ---------      --------
Net loss ...................................................  $   (0.64)     $  (0.20)   $   (6.38)     $  (0.94)
                                                              =========      ========    =========      ========

Weighted average basic and diluted shares outstanding ......     29,438        29,481       29,172        28,897
                                                              =========      ========    =========      ========

<CAPTION>
                                                               June 30,      March 31,    December      September
                                                                 2000          2000       31, 1999      30, 1999
                                                              ---------      --------    ---------      --------
<S>                                                           <C>            <C>         <C>            <C>
Net revenues ...............................................  $   4,190     $   7,069     $  6,601      $ 10,361
Income (loss) from operations ..............................     (5,636)       (1,031)      (1,000)          346
Loss before provision taxes ................................     (5,246)       (1,673)      (2,143)         (468)
Loss from continuing operations ............................     (5,555)       (1,765)      (2,187)         (516)
Income (loss) from discontinued operations .................    (25,235)      (14,780)          43           107
                                                              ---------      --------    ---------      --------
Net loss ...................................................  $ (30,790)    $ (16,545)    $ (2,144)     $   (409)
                                                              =========      ========    =========      ========
Per share of common stock basic and diluted
    Loss from continuing operations ........................  $   (0.20)    $   (0.08)    $  (0.12)     $  (0.04)
    Income (loss) from discontinued operations .............      (0.90)        (0.64)          --           0.01
                                                              ---------      --------    ---------      --------
Net loss ...................................................  $   (1.10)    $   (0.72)    $  (0.12)     $  (0.03)
                                                              =========      ========    =========      ========

Weighted average basic and diluted shares outstanding ......     27,936        23,091       17,584        15,929
                                                              =========      ========    =========      ========
</TABLE>










                                      F-20
<PAGE>


                                   SIGNATURES


     In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, hereunto duly
authorized.

                                YOUTHSTREAM MEDIA NETWORKS, INC.


                                  By: /s/ JAMES G. LUCCHESI
                                      ------------------------------
                                          JAMES G. LUCCHESI
                                          PRESIDENT AND CHIEF EXECUTIVE OFFICER

Date:  August 31, 2001


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

<TABLE>
<CAPTION>
     Signature                                        Title                                   Date
     ---------                                        -----                                   ----
<S>                                  <C>                                                <C>
/s/ JAMES G. LUCCHESI                President, Chief Executive Officer and             August 31, 2001
---------------------------          Director (Principal Executive Officer)
    JAMES G. LUCCHESI

/s/ IRWIN ENGELMAN                   Executive Vice President and Chief Financial       August 31, 2001
---------------------------          Officer (Principal Financial Officer and
    IRWIN ENGELMAN                   Principal Accounting Officer)

/s/ HARLAN D. PELTZ                  Chairman                                           August 31, 2001
---------------------------
    HARLAN D. PELTZ

/s/ HOWARD KLEIN                     Director                                           August 31, 2001
---------------------------
    HOWARD KLEIN

/s/ METIN NEGRIN                     Director                                           August 31, 2001
---------------------------
    METIN NEGRIN

/s/ DR. SIDNEY I. LIRTZMAN           Director                                           August 31, 2001
---------------------------
    DR. SIDNEY I. LIRTZMAN

/s/ BRUCE SLOVIN                     Director                                           August 31, 2001
---------------------------
    BRUCE SLOVIN

/s/ JONATHAN V. DIAMOND              Director                                           August 31, 2001
---------------------------
    JONATHAN V. DIAMOND
</TABLE>





                                       S-1

<PAGE>


                SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
                        YOUTHSTREAM MEDIA NETWORKS, INC.


<TABLE>
<CAPTION>
                                                                                         Additions
                                                                            Additions   Charged to
                                                              Balance at   Charged to      Other                   Balance at
                                                             Beginning of   Costs and    Accounts-   Deductions-     End of
                         Description                            Period      Expenses     Describe      Describe      Period
---------------------------------------------------------    ------------  ----------   ----------   -----------   ----------
<S>                                                              <C>          <C>           <C>          <C>          <C>
Year ended June 30, 2001
    Reserves and allowances deducted from asset accounts:
      Allowance for uncollectible accounts .................     $404          --           --           $213         $191

Year Ended June 30, 2000
    Reserves and allowances deducted from asset accounts:
      Allowance for uncollectible accounts .................     $158         $246          --            --          $404

Year Ended June 30, 1999
    Reserves and allowances deducted from asset accounts:
      Allowance for uncollectible accounts .................     $137         $ 21          --            --          $158
</TABLE>









                                      S-2