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

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

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

                                    FORM 10-K

(Mark One)

[X]  ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
     1934
     For the fiscal year ended June 30, 2002


                                       OR

[-]  TRANSITION REPORT UNDER 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
Incorporation or Organization)                              Identification No.)

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)

     Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act 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
                                        -----      -----

     Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-K contained in this form, 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. [ ]

     State issuer's revenues for its most recent fiscal year: $33,076,000

     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
August 31, 2002: $3,359,000.

     State the number of shares outstanding of each of the issuer's classes of
common equity, as of August 31, 2002: 33,591,000 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
--------                                                                          ----
<S>                                                                                 <C>
Part I

     1.  Business................................................................   2
     2.  Properties..............................................................   7
     3.  Legal Proceedings.......................................................   8
     4.  Submission of Matters to a Vote of Security Holders.....................   8

Part II

     5.  Market For Common Equity and Related Stockholder Matters................   9
     6.  Selected Financial Data.................................................   9
     7.  Management's Discussion and Analysis of Financial Condition
         and Results of Operations...............................................  11
     8.  Changes In and Disagreements With Accountants on
         Accounting and Financial Disclosure.....................................  16

Part III

     9.  Directors, Executive Officers, Promoters and Control Persons;
         Compliance With Section 16(a) of the Exchange Act.......................  17
     10. Executive Compensation..................................................  17
     11. Security Ownership of Certain Beneficial Owners and Management..........  17
     12. Certain Relationships and Related Transactions..........................  17
     13. Exhibits, List and Reports on Form 8-K..................................  17

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

Signatures....................................................................... S-1
Schedule II - Valuation and Qualifying Accounts.................................. S-2
</TABLE>

                                       i

<PAGE>

                                     PART I

DISCLOSURE REGARDING FORWARD LOOKING STATEMENTS

This report contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934 that involve risks and uncertainties, including statements regarding the
Company's capital needs, business strategy, expectations and intentions.
Statements that use the terms "believe," "do not believe," "anticipate,"
"expect," "plan," "estimate," "intend" and similar expressions are intended to
identify forward-looking statements. These statements reflect the Company's
current views with respect to future events and because the Company's business
is subject to numerous risks, uncertainties and other factors, actual results
could differ materially from those anticipated in the forward-looking
statements, including those set forth below under "Item 1. Business," "Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations" and elsewhere in this report. Actual results may differ from those
reflected in these statements, and the differences could be substantial.

The Company disclaims any obligation to publicly update these statements, or
disclose any difference between the Company's actual results and those reflected
in these statements. The information constitutes forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995. The
factors set forth below under "Item 1. Business," "Item 7. Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
other cautionary statements made in this report should be read and understood as
being applicable to all related forward-looking statements wherever they appear
in this report.

                                       1

<PAGE>

ITEM 1. BUSINESS

OVERVIEW

RECENT EVENTS

During fiscal 2002, YouthStream Media Networks, Inc. ("YouthStream" or the
"Company") operated, through its subsidiaries, two business segments: media and
retail. On August 5, 2002, following the close of the Company's fiscal year
2002, subsidiaries of the Company sold substantially all of the assets of the
media segment to a subsidiary of Alloy, Inc. ("Alloy"), which also assumed
certain of the liabilities related to the media business. The Company
discontinued any remaining media operations that were not sold to Alloy. Net
cash proceeds from the sale were approximately $6,900,000.

Following the sale of the Company's media assets to Alloy, the Company failed to
make certain interest payments owed to holders of $13,000,000 of the Company's
subordinated notes due in 2005, and, the Company's subsidiary Network Event
Theater, Inc. ("NET") failed to make certain interest payments owed to holders
of $5,000,000 of NET's subordinated notes due in 2003. The holder of $12,000,000
of the Company's subordinated notes has declared these notes immediately due and
payable under the terms of the notes and the holder of $2,765,000 of NET's
subordinated notes has declared these notes immediately due and payable under
the terms of the notes, which serves to accelerate the required payment of all
$5,000,000 of NET's notes due in 2003, under the terms of these notes.

NET also failed to make payments owed in August and September in connection with
a note issued by NET to a finance company, which has a current outstanding
balance, including principal and interest owed, of approximately $500,000. On
September 16, 2002, the finance company filed a lawsuit against NET seeking,
among other things, repayment in full of this amount. (See "ITEM 3 -- Legal
Proceedings" for further details.) In addition, the Company, NET, and NET's
subsidiary American Passage Media, Inc. ("American Passage") have failed to make
certain payments to creditors who have provided goods to or performed services
for these companies in the past. As of June 30, 2002 the Company had
approximately $25.4 million of current liabilities and $7.9 million of current
assets.

The Company and its subsidiaries have deferred payments to their debt holders
and creditors because the Company and its subsidiaries do not have sufficient
cash to repay their debts and discharge other liabilities in full as they
currently exist.

The Company is in the process of developing plans, with assistance from outside
consultants, including the Company's accountants and legal advisors, to seek to
make arrangements with creditors with respect to the restructuring of the debt
and other liabilities of the Company and its subsidiaries. The Company is also
in the process of seeking to implement certain changes to address recent weaker
than expected performance of its retail subsidiary. There can be no assurance
that the Company will succeed in effecting a restructuring or achieving
sufficient improvement in its retail operations that will enable it or its
subsidiaries to avoid the necessity of seeking bankruptcy protection. There also
can be no assurance that the Company will not be the subject of involuntary
bankruptcy proceedings initiated by its creditors.

The Company's consolidated financial statements in this report have been
prepared on the assumption that the Company will continue as a going concern.
However, the report of the Company's independent auditors dated September 27,
2002 includes a statement that the Company's financial condition raises
substantial doubt about its ability to continue as a going concern. (See "ITEM 7
- Management's Discussion and Analysis of Financial Condition and Results of
Operations - Liquidity and Capital Resources".)

The Company's ability to continue as a going concern is dependent upon a number
of factors, including the outcome of its debt restructuring efforts, its ability
to manage these efforts with significantly reduced staff and limited resources,
its ability to continue reducing operating expenses, and the performance of its
remaining retail operating subsidiary which may continue to experience declining
revenues, increased costs, or other factors that may impact that business
segment.

The Company also is exploring strategic alternatives with respect to this
business segment, which could include seeking to dispose of some or all of the
assets associated with this business segment if such disposition can be achieved
on terms favorable to the Company. The Company believes that consummation of a
disposition of all or substantially all of the assets associated with the retail
business segment would require a vote of the Company's shareholders.


                                       2

<PAGE>

There can be no assurance that the Company will be able to successfully complete
the steps necessary to continue as a going concern.

CORPORATE STRUCTURE

Network Event Theater, Inc. ("NET"), founded in 1995, held its initial public
offering in 1996. In February 2000, NET was reorganized and became a
wholly-owned subsidiary of a newly-established Delaware holding company,
YouthStream Media Networks, Inc. ("YouthStream" or the "Company"). During fiscal
2002, YouthStream's operating subsidiaries were NET and American Passage Media,
Inc. ("American Passage"), through which it conducted its media business; and
Beyond the Wall, Inc., formerly Trent Graphics, Inc. ("Beyond the Wall"),
through which it operated its retail business.

MEDIA BUSINESS

In fiscal 2002, YouthStream generated approximately 55% of its revenues from its
media assets and businesses. The Company's and its subsidiaries' principal media
assets included: (a) more than 20,000 proprietary "out-of-home" media
distribution locations at universities, colleges, high schools and middle
schools in the United States; (b) a database and other items related to the
Company's newspaper placement business; (c) equipment related to the Company's
advance movie screening business; (d) equipment, vehicles and other assets
related to the Company's event marketing business; and (e) certain intellectual
property including domain names, trademarks, and service marks related to the
Company's media business (together, "Media Assets").

During fiscal 2002, the Company sought to increase media revenues by (a) seeking
to reach more of the nation's teenagers; (b) targeting more youth off-campus;
(c) developing larger, Company-designed proprietary events; and (d) introducing
customer acquisition capabilities to its event marketing services, among other
things. Despite these efforts, the Company generated lower than expected
revenues during fiscal 2002, experienced lower than expected gross margins on
certain businesses, and faced severe liquidity issues during the last quarter of
the fiscal year. These results were due to a number of factors including
persistently negative economic conditions and increased competition in the
sectors in which the Company operated, namely media and retail.

In response to its liquidity issue and downward revision of earnings, the
Company implemented aggressive cost-cutting measures. It also pursued a number
of alternatives to increase cash available to fund operations. These efforts
ultimately were unsuccessful. The Company also engaged in discussions with a
number of parties in an effort to sell various assets and assign certain
liabilities associated with its media segment. As noted above, on August 5,
2002, following the close of the Company's fiscal year 2002, subsidiaries of the
Company sold substantially all of the Media Assets to Alloy and Alloy assumed
certain liabilities related to the Company's media segment (the "Alloy
Transaction").

For fiscal 2003, YouthStream expects to report approximately $150,000 of
revenues associated with the five weeks of fiscal 2003 during which it operated
its media segment.

RETAIL BUSINESS

During fiscal 2002, YouthStream's Beyond the Wall subsidiary sold decorative
wall posters, frames and related items (together, "Posters") to teenagers and
young adults at on-campus sales events, in retail stores, and via the Internet.
In fiscal 2002, the Company's retail segment generated approximately 45% of its
revenues.

During fiscal 2002, Beyond the Wall sold Posters through two distribution
channels: on-campus sales events ("Events") and a chain of retail stores. Beyond
the Wall's on-campus sales events were held at more than 600 colleges and
universities nationwide in the Fall and Spring of fiscal 2002, and generated
more than $6,000,000 in revenues, making Beyond the Wall, the Company believes,
the largest on-campus seller of Posters in the country.

As of June 30, 2002, Beyond the Wall also operated a chain of thirty-six retail
stores ("Stores") operating in more than twenty states nationwide. During fiscal
2002, Stores were operating near college and university campuses, in urban
locations, in tourist destinations, and in malls.

Revenues from the Company's retail segment grew approximately 49% in fiscal 2002
compared to fiscal 2001. However, Beyond the Wall has experienced weaker than
expected performance in its Stores during the last quarter of

                                       3

<PAGE>

fiscal 2002 and the first quarter of fiscal 2003, and generated lower than
expected revenues from conducting its Events during the first quarter of fiscal
2003. The Company believes these declines are attributable to a variety of
factors including, among other things, general economic conditions, issues
related to the management of the Company's retail store expansion plan, the
Company's limited ability to invest in capital expenditures, including a
point-of-sale inventory tracking system, and increased competition. In addition
to these factors, during the fourth quarter of fiscal 2002, three Beyond the
Wall employees responsible for organizing Events and leading Beyond the Wall's
Store expansion plan resigned without notice and attempted to establish a
competing Events business. Beyond the Wall commenced litigation against these
former employees that was promptly settled out-of-court; however, the company
believes these events negatively impacted its ability to conduct Events and may
continue to have a negative effect.

During fiscal 2003, Management decided to close at least fifteen to twenty
unprofitable or non-strategic Beyond the Wall stores. The Company believes this
will allow it to decrease the overhead necessary to manage the Beyond the Wall
store chain and to increase profitability of existing Stores. Aggregate costs
associated with closing these stores is expected to be approximately $100,000 to
$150,000, which does not include additional costs expected to be experienced in
terminating outstanding lease obligations associated with closing stores. Costs
of terminating lease obligations cannot be quantified at this time and will
depend on real estate market conditions and other factors, but the aggregate of
lease termination expenses is not expected to exceed $1,100,000.

MEDIA SEGMENT:  ASSETS AND LIABILITIES ASSIGNED TO ALLOY

TANGIBLE AND INTANGIBLE ASSETS SOLD TO ALLOY

YouthStream operated three out-of-home advertising distribution networks in
fiscal 2002 ("Networks"). First, YouthStream's high school wallboards, operating
under the "GymBoards(R)" name, allowed clients to place advertisements on more
than 15,000 gender specific message and information centers installed in boys'
and girls' high school and middle school locker rooms. Second, YouthStream's
college wallboard network, operating under the "Campus Voice(R)" name, consisted
of more than 4,000 wallboards installed at universities and colleges across the
country. Finally, YouthStream's network of more than 2,000 college newspaper
advertising stands, operating under the "AdRax(R)" name, allowed advertisers to
place messages at over 275 colleges and universities nationwide. The Networks
and inventory related to the Networks were sold to Alloy as part of the Alloy
Transaction.

YouthStream also provided event-marketing services to clients in fiscal 2002,
including the ability to develop, plan and execute proprietary and custom events
to advertise these clients' products and services. In addition, YouthStream
partnered with major movie production studios to create on-campus advance
screening and marketing promotions targeting the young adult market
("Screenings"). And, YouthStream operated a poster advertising service in fiscal
2002, providing clients with the ability to reach students in their own
environments via bulletin boards on campuses nationwide. As part of the Alloy
Transaction, the Company sold certain assets related to these event-marketing
businesses, including vehicles, inventory, and other equipment. The Company
retained certain equipment related to its Screenings business as detailed in
"MEDIA SEGMENT: ASSETS AND LIABILITIES NOT TRANSFERRED TO ALLOY" below.

During fiscal 2002, YouthStream's college newspaper advertising placement
service provided clients with the ability to run advertising in college and
graduate school newspapers in the United States. YouthStream's assets used in
connection with this business included a database containing information about
these newspapers. This database was sold to Alloy as part of the Alloy
Transaction.

In addition, the registered trademarks and service marks associated with the
Media Assets, including "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), and "HotStamp" were sold to Alloy as part of the Alloy
Transaction. The Company's rights to certain other

                                       4

<PAGE>

marks including "FUND-U," "TEENSCREEN," and "THUNDERDORM" also were assigned to
Alloy as part of the Alloy Transaction. And, domain names associated with the
Company's media business, including www.youthstream.com and www.teen.com, were
sold to Alloy.

MEDIA SEGMENT:  ASSETS AND LIABILITIES NOT TRANSFERRED TO ALLOY

Subsequent to the Alloy Transaction, the Company retained approximately
$1,600,000 of current assets and $1,600,000 of payables and accrued expenses
relating to this segment. The Company also retained certain liabilities,
primarily in connection with office and equipment leases.

In addition, forty-eight of the theaters operated by YouthStream as part of its
Screenings business during fiscal 2002 ("Satellite Schools") featured
closed-circuit satellite and digital projection technologies ("Satellite
Equipment") that allowed YouthStream to simulcast movies, concerts, featured
speakers and other live events to student audiences nationwide. Prior to the
close of the fiscal year 2002 the Company determined it would cease using the
Satellite Equipment during fiscal 2003. The Company intended to conduct
satellite programming through more cost-effective alternative means. However,
this business was sold to Alloy prior to any Screenings being conducted in
fiscal 2003.

The Satellite Equipment acts as collateral pursuant to a Master Loan and
Security Agreement between NET and Wells Fargo Equipment Finance, Inc. ("Wells
Fargo"), as successor in interest to Charter Financial, Inc. ("Wells Fargo
Loan"), and the Satellite Equipment was not sold to Alloy as part of the Alloy
Transaction.

NET is also a party to agreements with the Satellite Schools ("School
Contracts") that allowed NET to use the Satellite Equipment installed at
Satellite Schools to conduct Screenings. Upon termination of these School
Contracts by NET, NET is required to remove the Satellite Equipment and restore
the venues where the Satellite Equipment is installed to its pre-installation
condition. These School Contracts and any liabilities associated with these
School Contracts were not assigned to Alloy.

During fiscal 2002, the Company also conducted customer acquisition programs for
clients, as part of its event marketing business. Virtually all of the Company's
customer acquisition program revenues during fiscal 2002 were generated pursuant
to an agreement with a major credit card company ("Credit Card Agreement"). The
Credit Card Agreement expired in August 2002 and was not assigned to Alloy.

NON-COMPETITION AGREEMENT

Pursuant to the purchase agreement in the Alloy Transaction, until August 5,
2004, the Company is prohibited from engaging in certain businesses similar to
those it sold to Alloy, including (a) owning or operating display media boards,
and/or providing related marketing and media network services, targeting
individuals aged 10 through 24; (b) developing, soliciting and/or placing
advertising for any third party in print media, targeting individuals aged 10
through 24; (c) owning and/or operating college newspaper advertising stands;
(d) conducting event marketing programs targeting individuals aged 10 through
24; (e) conducting film screenings on college and/or university campuses; (f)
conducting acquisition or promotional events on college and/or university
campuses except for marketing or promotional events directly and solely related
to its retail poster business; (g) conducting customer acquisition programs,
targeting individuals aged 10 through 24; and (h) conducting any other
advertising, promotions or services business whose primary method of generating
revenue is to promote the products or services of any third party to individuals
aged 10 through 24.

RETAIL SEGMENT:  PRODUCTS AND SERVICES

ON-CAMPUS COLLEGE POSTER SHOWS

The Company believes that its Events constitute the largest network of on-campus
poster shows in the nation's college market. In fiscal 2002, Beyond the Wall
held Events on more than 600 campuses nationwide. More than 500,000 posters,
frames and other items were purchased during these Events, generating
approximately 43% of the Company's retail segment revenues for fiscal 2002.

                                       5

<PAGE>

RETAIL STORE OPERATIONS; ONLINE SALES

Beyond the Wall also operates its retail poster Stores in college towns, major
urban areas, tourist destinations and malls around the country. As of June 30,
2001, Beyond the Wall operated thirty-one Stores. During fiscal 2002, Beyond the
Wall opened sixteen new Stores and closed eleven Stores. As of June 30, 2002, it
operated thirty-six Stores. Beyond the Wall's Stores generated approximately 56%
of the Company's retail segment revenues for fiscal 2002. The remainder of
Beyond the Wall's sales were generated through its website beyondthewall.com.

RETAIL STRATEGY

Beyond the Wall's retail strategy during fiscal 2002 consisted of several
primary initiatives. First, Beyond the Wall executed an expansion plan, opening
sixteen new Stores. New store openings were designed to increase revenues
generated by the Company's retail segment, and during fiscal 2002, revenues from
this segment increased 49%.

During fiscal 2002, Stores were opened in several states near college campuses,
in tourist destination locations, in urban areas, and in malls, to determine
which locations would most successfully generate revenues and profits for the
Company. The Company experienced the most successes with its urban and campus
Stores located in the Northeast and Midwest.

During fiscal 2003, Beyond the Wall intends to focus on closing at least fifteen
to twenty unprofitable or non-strategic Stores, and to seek to increase revenue
and profitability in its remaining Stores. The Company believes these efforts
will allow it to decrease the overhead associated with operating its remaining
Stores, and to focus on increasing profits in the Stores it continues to
maintain.

The Company may also seek to consummate a sale or other disposition of all or
part of its retail assets if such sale or disposition can be completed on terms
favorable to the Company. The Company believes any sale of all or substantially
all of these assets would require approval by the Company's shareholders.

COMPETITION

The retail decorative wall poster industry for teens and young adults is both
highly competitive and fragmented. The Company believes that the principal bases
upon which Beyond the Wall competes are selection, quality, price, store
location and service. Beyond the Wall's Stores compete with other sellers of
decorative art, some of which are more established, better capitalized or have
access to greater resources than Beyond the Wall. Although Beyond the Wall
believes it is currently the largest and most established on campus seller of
Posters via its annual Events, competition from other businesses seeking to
schedule events similar to Beyond the Wall's Events on campuses has increased
and can be expected to continue increasing.

SEASONALITY

The seasonality of the Company's retail businesses affects its profitability.
Since products are most often purchased during the academic school year
primarily from August through October, the Company experiences substantial
seasonality in sales and profitability during the year.

PERSONNEL

MEDIA

As of August 1, 2002, the Company employed sixty-five full-time employees in
connection with its media operations. By September 30, 2002, all of these
employees were transferred to Alloy or terminated by the Company pursuant to the
Alloy Transaction.

                                       6

<PAGE>

RETAIL

As of August 1, 2002, the Company employed 103 full-time employees and
seventy-seven 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.

CORPORATE

During the first three quarters of fiscal 2002, James "P.T." Lucchesi served as
the Company's President and Chief Executive Officer, and Irwin Engelman acted as
its Chief Financial Officer. On April 11, 2002, Mr. Lucchesi and Mr. Engelman
ceased to be employed by the Company. Also on April 11, Dennis Roche was
appointed to be the Company's President and Chief Operating Officer and Wesley
Ramjeet, the Company's Corporate Controller, was appointed to be the Company's
Acting Chief Financial Officer. On August 9, 2002, following the close of the
Alloy Transaction, Mr. Roche resigned from the Company. On August 17, 2002,
Jonathan Diamond, a member of the Company's Board of Directors, became the
Company's Interim Chief Executive Officer and has acted on a consulting basis in
a management supervisory capacity.

As of September 30, 2002, four full-time employees--including the Company's
Acting Chief Financial Officer and its General Counsel--continue to perform
services principally dedicated to debt restructuring and winding down the
operations of American Passage and NET, including collection of receivables,
settlement of payables and liabilities, and general corporate matters. Two
additional full-time employees are providing transitional services to the Beyond
the Wall retail subsidiary, as well as assisting with general corporate matters.

The Company's Chairman and Chief Corporate Strategist, Harlan Peltz, also
continues to perform services for the Company pursuant to a contract between
himself and the Company which terminates on February 28, 2003.

ITEM 2. PROPERTIES

The Company's principal executive offices are located in approximately 20,000
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. Rental payments under that lease have not been made by
the Company to the landlord of this property since June 1, 2002, and, pursuant
to a letter of credit in favor of the landlord, the landlord had drawn down
approximately $150,000 under the letter of credit as of August 30, 2002. The
current available balance under the letter of credit as of September 30, 2002 is
approximately $150,000.

During fiscal 2002 the Company also rented office space in Cambridge and Acton,
Massachusetts; Seattle, Washington; Los Angeles, California; Chicago, Illinois
and Tempe, Arizona, related to its media segment operations. All of these
offices have been vacated by the Company in advance of the lease expiration
dates. The Company executed settlements or obtained releases of claims from the
landlords of the Acton and Cambridge, MA and Los Angeles, CA offices. The
landlord of the Chicago, IL office has filed a lawsuit against the Company
seeking damages in the amount of approximately $15,000 in connection with this
lease.

Beyond the Wall also owns a warehouse containing office space in Stroudsburg,
Pennsylvania, where the Company's retail operations are headquartered.

As of June 30, 2002, Beyond the Wall was a party to leases for retail stores
operating in Ann Arbor, Michigan; Athens, Georgia; Berkeley, California;
Bloomington, Indiana; Boulder, Colorado; Newark, Delaware; Burlington, Vermont;
Champaign, Illinois; Chicago, Illinois; East Lansing, Michigan; Washington,
D.C.; Harrisburg, Pennsylvania; Holyoke, Massachusetts; Ithaca, New York;
Knoxville, Tennessee; Lawrence, Kansas; Lexington, Kentucky; Los Angeles,
California; Myrtle Beach, South Carolina; New Hope, Pennsylvania; New York, New
York; Philadelphia, Pennsylvania; Saint Louis, Missouri; Seattle, Washington;
Tempe, Arizona; Chesapeake, Virginia; Hadley, Massachusetts; Jefferson Valley,
New York; Valley Mall, Virginia; Nanuet, New York; Augusta, Georgia;
Tallahassee, Florida; and Charlottesville, Virginia. The total future lease
obligations as of June 30, 2002 for Beyond the Wall was approximately $2.5
million.

As of June 30, 2002, Beyond the Wall had vacated non-performing stores in
Northampton, Massachusetts; Dinkytown, Minnesota; Cincinnati, Ohio; Cleveland,
Ohio; and Chicago, Illinois, in advance of the termination dates for the leases
governing these stores. Beyond the Wall intends to seek negotiated settlements
of these liabilities where possible.

The Company believes it has adequate insurance to cover the value of its leased
property and the personal property therein.

                                       7

<PAGE>

ITEM 3. LEGAL PROCEEDINGS

The Company is a party to certain legal proceedings commenced against it by
former employees of the Company's subsidiaries. These actions include: (a) a
litigation pending in the District Court of Travis County, Texas by a former
employee of the Company's CommonPlaces, LLC ("CP") subsidiary claiming that he
is entitled to receive, without cost, an aggregate of 215,083 shares of
YouthStream common stock; (b) a litigation filed in the U.S. District Court for
the District of Massachusetts by a former CP employee seeking damages based on
claims for breach of his employment contract, breach of implied covenants of
good faith, and violation of the Massachusetts unfair and deceptive trade
practices act; and (c) an arbitration filed in New York by the Company's former
President and Chief Executive Officer seeking damages for alleged breach of his
employment agreement, among other things. The Company is currently defending
these actions and has asserted counterclaims against the plaintiffs in two of
these actions.

In addition, certain creditors of the Company and its subsidiaries and certain
holders of the Company's and its NET subsidiary's debt have asserted or have
threatened claims against the Company and its subsidiaries, which are the result
of the Company's failure to pay certain debts and liabilities as they came due.

Among the claims is a litigation filed in New York State Court by Wells Fargo in
connection with the Wells Fargo Loan, seeking past due payments and future
payments, late charges and interest costs and expenses, and certain collateral
in connection with NET's failure to make certain payments owed under the Wells
Fargo Loan.

In addition, certain landlords of stores which Beyond the Wall has vacated in
advance of the expiration dates of the Store leases or failed to pay rent when
due have commenced litigation against Beyond the Wall.

Given the Company's current financial situation, the costs of defending these
proceedings, diversion of management's attention to these matters, or the
outcome of such proceedings could have a material adverse effect on the
Company's financial condition or operating results, including its ability to
restructure its debts without seeking bankruptcy protection or being the subject
of an involuntary bankruptcy petition, or its ability to continue as a going
concern.

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

No matter was submitted during the fourth quarter of the fiscal year covered by
this report to a vote of the Company's security holders.

                                       8

<PAGE>

                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The Company's common stock is traded on the Nasdaq Small Cap Market ("Nasdaq")
under the symbol "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.

     Fiscal 2002                                                HIGH      LOW
                                                                ----      ---

         First Quarter.....................................     2.38      0.88
         Second Quarter....................................     1.51      1.15
         Third Quarter.....................................     1.39      0.51
         Fourth Quarter....................................     0.77      0.11

     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 June 30, 2002, there were approximately 224 holders of record of the
Company's common stock. 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.

RECENT SALES OF UNREGISTERED SECURITIES

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. The Company relied on the exemption provided by Section 4(2)
of the Securities Act of 1933, as amended, in making such sales.

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.

In July 2000, the Company realized net proceeds of approximately $1,000,000 from
the sale of an 11% Subordinated Note and warrants to purchase 60,000 shares of
the Company's common stock.

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.

                                       9

<PAGE>

<TABLE>
<CAPTION>

                                                                        Year ended June 30,
                                                -------------------------------------------------------------------
                                                   2002           2001           2000          1999          1998
                                                -------------------------------------------------------------------
                                                               (In thousands, except per share data)
<S>                                             <C>            <C>            <C>            <C>           <C>
Net sales and other income ................     $  33,076      $  25,875      $  28,221      $ 13,266      $ 11,188
Net loss
  Loss from continuing operations .........       (20,802)       (26,106)       (10,023)       (9,190)       (7,231)
  Loss from discontinued operations .......           290       (211,697)       (39,865)         --            --
Net loss ..................................       (20,512)      (237,803)       (49,888)       (9,190)       (7,231)
Total Assets ..............................        19,987         48,706        276,445        30,252        15,676
Long-term debt and capital lease
  obligations, less current portion .......           113 (1)     18,635         18,815         6,589         3,459

Basic and diluted
  Loss from continuing operations .........         (0.68)         (0.89)         (0.47)        (0.72)        (0.69)
  (Loss)/gain from discontinued operations           0.01          (7.22)         (1.89)         --            --
Net loss ..................................         (0.67)         (8.11)         (2.36)        (0.72)        (0.69)
Weighted average basic and diluted
  common stock outstanding ................        30,414         29,334         21,111        12,800        10,508
</TABLE>

(1)  Excludes $18,184 of long term debt classified as current which was in
     default.

                                       10

<PAGE>

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

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 include, but are not limited to,
the Company's ability to discharge its liabilities and restructure its debt,
changing consumer tastes 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, 2002 to the twelve
months ended June 30, 2001 and compares the twelve months ended June 30, 2001 to
the twelve months ended June 30, 2000.

RESULTS OF OPERATIONS

(in thousands)

YEAR ENDED JUNE 30, 2002 COMPARED TO YEAR ENDED JUNE 30, 2001

For the twelve months ended June 2002, net revenues were $33,076 as compared to
$25,875 for the twelve months ended June 30, 2001. The increase of $7,201 was
due to an increase in the media segment of $2,268 and an increase of $4,933 in
the retail segment. The retail segment increase was attributable to comparable
same stores sales growth as well as the rapid expansion of the retail store
chain. The media increase was due primarily to the growth of the event marketing
business.

For the twelve months ended June 30, 2002, cost of goods sold were $15,277 as
compared to $13,342 for the twelve months June 30, 2001. The increase of $1,935
was due to the growth of the event marketing business, which has a lower gross
profit margin, and the increase in the retail segment expense was a function of
increased revenue in that segment primarily related to same store growth and
expansion of the retail store chain.

For the twelve months ended June 30, 2002, selling, general and administrative
expenses were $20,688 as compared to $20,627 for the twelve months ended June
30, 2001. The increase of $61 was due to higher costs associated with the
opening of retail stores, offset by savings attributable to lower headcount in
the media business.

For the twelve months ended June 30, 2002, corporate expenses were $6,123 as
compared to $8,163 for the twelve months ended June 30, 2001. The decrease of
$2,040 was due to various cost cutting initiatives, including the reduction in
corporate officers and staff.

For the twelve months ended June 30, 2002, depreciation and amortization
expenses were $2,731 as compared to $3,814 for the twelve months ended June 30,
2001. The $1,083 decrease was due primarily to the adoption of FAS 142, a new
accounting policy that no longer permits amortization of goodwill.

For the twelve months ended June 30, 2002, interest income was $450 as compared
to $2,131 for the twelve months ended June 30, 2001. The decrease of $1,681 was
due to lower interest income earned on decreased cash balances.

For the twelve months ended June 30, 2002, interest expense was $3,080 as
compared to $3,156 for the twelve months ended June 30, 2001. The decrease of
$76 was primarily related to the decrease in long-term debt.

For the twelve months ended June 30, 2002, loss from discontinued operations was
$587 as compared to $47,744 for the twelve months ended June 30, 2001. For the
twelve months ended June 30, 2001, the loss from discontinued operations of
$47,744 represents operating losses for the Company's online segment primarily
incurred during the period from January to June 2001.

                                       11

<PAGE>

For the twelve months ended June 30, 2002, gain on disposal of discontinued
operations was $877, as compared to a loss on disposal of discontinued
operations of $163,953 for the twelve months ended June 30, 2001.

YEAR ENDED JUNE 30, 2001 COMPARED TO 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 in
fiscal 2002 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 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 .....   $ 25,875     $ 28,221
   Contributed Media ..................................       --       $ (2,890)
                                                          ---------------------
   Subtotal ...........................................   $ 25,875     $ 25,331

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

   Adjusted Revenue ...................................   $ 24,081     $ 21,195
                                                          =====================

For the twelve months ended June 30, 2001, adjusted net revenues were $24,081
compared to $21,195 for the twelve months ended June 30, 2000. The revenue
growth of $2,886 was attributable to an increase of retail of $2,366 and an
increase in the media segment of $520. 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 $13,342 as compared
to $12,838 for the twelve months ended June 30, 2000. The increase of $504 was
due to a decline of $161 in the media segment and a $665 increase in the retail
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 $20,627 as compared to $14,811 for the twelve months ended June
30, 2000. The increase of $5,816 was due primarily to higher costs incurred in
the retail segment, including $2,800 of one-time costs related to the
acquisition of Beyond the Wall and higher expenses related to the 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 $3,814 ($2,177 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 $314
was primarily due to the increased fixed assets in the media segment as well as
the additional stores in the retail segment.

                                       12

<PAGE>

For the twelve months ended June 30, 2001, impairment loss on assets was $6,912.
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 and a write-down of $317 on the
remaining goodwill of Beyond the Wall(R).

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 $3,156 as
compared to $1,000 for the twelve months ended June 30, 2000. The increase of
$2,156 was primarily related to the increase in long-term debt.

For the twelve months ended June 30, 2001, loss from discontinued operations was
$47,744 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 $47,744
represented 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 represented 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.

LIQUIDITY AND CAPITAL RESOURCES

To date, the Company has financed its operations primarily through the sale of
equity securities and debt. As of June 30, 2002, the Company had $0.5 million in
cash and marketable securities, a decrease of $20.0 million from June 30, 2001.
The Company has never been profitable and expects to continue to incur operating
losses in the future. The Company will need to generate significant revenues to
achieve profitability and to be able to continue to operate. The Company's
consolidated financial statements have been prepared on the assumption that the
Company will continue as a going concern. The Company's independent auditors
have issued their report dated September 27, 2002 that includes an explanatory
paragraph stating that the Company's recurring losses, accumulated deficit, and
debt in default, among other things, raise substantial doubt about the Company's
ability to continue as a going concern. The Company's historical sales have
never been sufficient to cover its expenses and it has been necessary to rely
upon financing from the sale of equity securities and debt to sustain
operations. The Company might find it necessary to rely upon financing from
debt, if made available, or on the sale of equity securities to continue to
sustain its operations and to be able to meet its cash demands. There can be no
assurance that the Company will obtain such additional capital or that such
additional financing will be sufficient for the Company's continued existence.
Furthermore, there can be no assurances that the Company will be able to
generate sufficient revenues from the operation of the retail business to meet
the Company's obligations. These conditions raise substantial doubt about the
Company's ability to continue as a going concern. See "Item 1, Business--Going
Concern".

During the year ended June 30, 2002, the Company used $15.1 million cash in
operating activities mostly related to its $20.5 million loss during 2002, which
included cash used in discontinued operations of $2.6 million and non-cash
activities $2.7 million for depreciation and amortization, and $8.1 million in
loss on disposal of assets. During the year ended June 30, 2001 the Company used
$20.9 million in operating activities, mostly related to its $ $237.8 million
loss during 2001, which included $197.3 million relating to the Company's
discontinued operations and non-cash activities of $7.0 million in impairments
of goodwill and other assets, and $3.8 million in depreciation and amortization.
During the year ended June 30, 2000, the Company used $28.4 million in operating
activities, mostly related to its $49.9 million loss during 1999 which included
discontinued operations of $22.4 million and non-cash activities of $3.5 million
in depreciation and amortization.

                                       13

<PAGE>

For the year ended June 30, 2002, the Company generated $3.2 million in
investing activities primarily relating to the sale of $5.7 million of
investment in marketable debt securities, offset by $1.4 million for the
purchase of fixed assets, $1.1 million in connection with additional earnout
payment on the retail acquisition and purchase of an event marketing plan. For
the year ended June 30, 2001, the Company generated $18.2 million in investing
activities primarily relating to the sale of investment in marketable debt
securities, offset by $1.8 million for capital expenditures. For the year ended
June 30, 2000, the Company used $29.1 million in investing activities, including
$25.2 million from the purchase of marketable debt securities.

Net cash used in financing activities was $2.4 million for the year ended June
30, 2002 and $0.6 million for the year ended June 30, 2001. For the year ended
June 30, 2000, the net cash provided by financing activities was $68.7 million.

The Company's principal commitments consist of obligations outstanding under
operating leases totaling approximately $5.4 million.

The Company's capital requirements depend on its revenue growth, operating
structure and the amount of resources devoted to the retail operations.

The Company does not have any material commitments for capital expenditures.

CRITICAL ACCOUNTING POLICIES

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.

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 in stores. Retail revenue is recognized at the
time of the sale to the consumer.

IMPAIRMENT OF GOODWILL

We periodically evaluate acquired businesses for potential impairment
indicators. Our judgments regarding the existence of impairment indicators are
based on legal factors, market conditions and operational performance of our
acquired businesses. Future events could cause us to conclude that impairment
indicators exist and that goodwill associated with our acquired businesses is
impaired. Any resulting impairment loss could have a material adverse impact on
our financial condition and results of operations.

ACCOUNTS RECEIVABLE

Accounts receivable consist primarily of amounts due to us from our normal
business activities. We maintain an allowance for doubtful accounts to reflect
the expected uncollectibility of accounts receivable based on past collection
history and specific risk identified in the portfolio.

                                       14

<PAGE>

ADDITIONAL UNCERTAINTIES

In July 2002, the Company obtained an agreement with the holder of $11,500,000
of the subordinated notes ("YSTM Notes") whereby the installment of interest in
the amount of approximately $633,000 due by the Company to this note holder on
June 30, 2002 was deferred until August 31, 2002. On August 31, 2002, the
Company failed to make the deferred interest payment. According to the terms of
the YSTM Notes, the Company's failure to pay the deferred interest on the YSTM
Notes when it became due and payable, after a period of five business days,
constitutes an "Event of Default." If an Event of Default occurs and is
continuing, the holders of at least a majority in aggregate principal amount of
the outstanding YSTM Notes may, upon notice to the Company ("Notice"), declare
the unpaid principal of and any accrued interest on all of the YSTM Notes to be
immediately due and payable. On September 9, 2002, the Company received such
Notice.

In July 2002, the Company obtained an agreement with the holder of the
$1,000,000 of subordinated notes ("YSTM 2 Notes") due July 31, 2005 whereby the
installment of interest in the amount of approximately $55,000 due by the
Company to this note holder on June 30, 2002 was deferred until August 31, 2002.
On August 31, 2002, the Company failed to make the deferred interest payment.
According to the terms of the YSTM 2 Notes, the Company's failure to pay
interest on any of the YSTM 2 Notes when the interest becomes due and payable,
after a period of five business days, constitutes an "Event of Default." If an
Event of Default occurs and is continuing, the holders of at least a majority in
aggregate principal amount of the YSTM 2 Notes may, upon notice to the Company,
declare the unpaid principal of and any accrued interest on all of the YSTM 2
Notes to be immediately due and payable. The Company has not, to date, received
any notice declaring the YSTM 2 Notes immediately due and payable; however, no
assurance can be given that such notice will not be issued by the note holder.

In July 2002, NET obtained agreements with eight of the holders of the NET Notes
whereby interest payments in the aggregate amount of approximately $275,000 due
by NET to these note holders on July 8, 2002 was deferred until September 8,
2002. On September 8, 2002, NET failed to make the deferred interest payments.
According to the terms of the NET Notes, NET's failure to pay interest on any of
the NET Notes when the interest becomes due and payable, after a period of five
business days, will constitute an "Event of Default." If an Event of Default
occurs and is continuing, the holders of at least a majority in aggregate
principal amount of the NET Notes may, upon notice to NET, declare the unpaid
principal of and any accrued interest on all of the NET Notes to be immediately
due and payable. On September 24, 2002, NET received such notice.

NET also failed to make payments of approximately $65,000 due on August 1, 2002
and $65,000 due on September 1, 2002, in connection with a note issued by NET to
a finance company in March 2000 in the aggregate principal amount of $1,971,000
(the "NET Note"). The NET Note bears interest at the rate of 11.95% per annum
and is secured by certain equipment owned by NET. On September 6, 2002, NET
received notice from the finance company holding the NET Note stating that the
entire outstanding indebtedness under the NET Note is due and payable pursuant
to the terms of the NET Note. On September 16, 2002, the holder of the NET note
commenced litigation against NET seeking repayment of the NET note, among other
things.

Management is in the process of developing plans, with assistance from outside
consultants, including the Company's accountants and legal advisors, to seek to
make arrangements with creditors with respect to the restructuring of the debt
and other liabilities of the Company and its subsidiaries. There can be no
assurance that the Company will succeed in effecting a restructuring that will
enable it or its subsidiaries to avoid bankruptcy.

                                       15

<PAGE>

ITEM 8. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market Risk

The Company's remaining media accounts receivable are subject, in the normal
course of business, to collection risks. These receivables are subject to
additional collection risks, due to the sale of the Company's Media Assets and
limited remaining resources with which to pursue these receivables.

Interest Rate Risk

The Company's 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 the Company.

ITEM 9. FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA

Information with respect to this item appears as a separate section following
Item 13 of this report. Such information is incorporated herein by reference.

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

None.

                                       16

<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, 2002 and
          2001, Consolidated Statements of Operations for the years ended June
          30, 2002, 2001 and 2000, Consolidated Statements of Cash Flows for the
          years ended June 30, 2002, 2001 and 2000, Consolidated Statements of
          Stockholders' Equity for the years ended June 30, 2002, 2001 and 2000.

     (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.}

(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).

                                       17

<PAGE>

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).

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).

                                       18

<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).

                                       19

<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).

                                       20

<PAGE>

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).

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 Agreement of 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

                                       21

<PAGE>

                        YOUTHSTREAM MEDIA NETWORKS, INC.
                        CONSOLIDATED FINANCIAL STATEMENTS

                                      INDEX

<TABLE>

<S>                                                                                         <C>
Report of Independent Auditors...........................................................   F-2

Consolidated Financial Statements:

Consolidated Balance Sheets at June 30, 2002 and 2001....................................   F-3

Consolidated Statements of Operations for the years ended
  June 30, 2002, 2001 and 2000...........................................................   F-4

Consolidated Statements of Cash Flows for the years ended
  June 30, 2002, 2001 and 2000...........................................................   F-5

Consolidated Statements of Stockholders' (Deficiency) Equity for the years ended
  June 30, 2002, 2001 and 2000...........................................................   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
</TABLE>

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. (the "Company") as of June 30, 2002 and 2001 and the
related consolidated statements of operations, cash flows and changes in
stockholders' (deficiency) equity for each of the three years in the period
ended June 30, 2002. Our audit also included the financial statement schedule
listed in the Index at item 14(a). These consolidated financial statements and
schedule are the responsibility of the Company's management. Our responsibility
is to express an opinion on these financial statements and schedule based on our
audits.

We 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. as of June 30, 2002 and 2001, and the
consolidated results of its operations and its cash flows for each of the three
years in the period ended June 30, 2002 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.

The accompanying financial statements have been prepared assuming that
Youthstream Media Networks, Inc will continue as a going concern. As more fully
described in Note 1, the Company has incurred recurring operating losses and has
a working capital and stockholders' deficiency. In addition, the Company is in
default with respect to its long-term debt. These conditions raise substantial
doubt about the Company's ability to continue as a going concern. Management's
plans in regard to these matters are also described in Note 1. The financial
statements do not include any adjustments to reflect the possible future effects
on the recoverability and classification of assets or the amounts and
classification of liabilities that may result from the outcome of this
uncertainty.

                                                      /s/ Ernst & Young LLP

New York, New York
September 27, 2002

                                      F-2

<PAGE>

                        YouthStream Media Networks, Inc.
                           Consolidated Balance Sheets
                                 (In thousands)

<TABLE>
<CAPTION>

                                                                                    June 30,     June 30,
                                                                                      2002         2001
                                                                                   ---------    ---------
<S>                                                                                <C>          <C>
Assets
Current assets:
  Cash and equivalents .........................................................   $     597    $  14,927
  Marketable debt securities, at amortized cost ................................        --          5,655
  Accounts receivable, net of allowance for doubtful
    accounts of $176 and $171 at June 30, 2002 and
    2001, respectively .........................................................       3,584        2,461
  Inventories, net of allowance of $464 and $146 at
    June 30, 2002 and 2001, respectively .......................................       2,584        2,606
  Prepaid expenses .............................................................         185          387
  Deposits and other current assets ............................................         225          240
  Restricted cash ..............................................................         768          576
                                                                                   ---------    ---------
Total current assets ...........................................................       7,943       26,852

Property and equipment, net ....................................................       4,560        6,612
Deferred financing costs, net ..................................................       2,560        3,375
Intangible assets, net .........................................................       4,924       10,785
Restricted cash ................................................................        --            752
Non-current assets from discontinued operations ................................        --            330
                                                                                   ---------    ---------
Total assets ...................................................................   $  19,987    $  48,706
                                                                                   ---------    ---------

Liabilities and stockholders' (deficiency) equity
Current liabilities:
  Accounts payable .............................................................   $   1,931    $   2,723
  Accrued employee compensation ................................................         585        1,973
  Accrued expenses .............................................................       3,007        3,093
  Current liabilities of discontinued operations ...............................         698        3,381
  Deferred revenues ............................................................         548        1,750
  Current portion of deferred purchase price ...................................         375        1,500
  Current portion of capitalized lease obligations .............................          30           46
Current maturities of long-term debt in default (see Note 6) ...................      18,184        1,169
                                                                                   ---------    ---------
Total current liabilities ......................................................      25,358       15,635
Net non-current liabilities of discontinued operations .........................          38          185
Capitalized lease obligations ..................................................         113            5
Long-term debt .................................................................        --         18,630
Deferred rent ..................................................................         358          366
Deferred purchase price ........................................................        --            375

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

Stockholders' (deficiency) equity:
  Preferred stock, $.01 par value, 5,000 shares authorized, no shares issued and
    outstanding ................................................................        --           --
  Common stock, $.01 par value, 100,000 shares authorized,
    33,591 and 30,091 shares issued at June 30, 2002
    And 2001, respectively .....................................................         336          301
  Additional paid-in capital ...................................................     330,774      329,097
  Accumulated deficit ..........................................................    (336,161)    (315,649)
  Treasury stock, 607 shares and 143 shares at June 30, 2002 and 2001,
    respectively ...............................................................        (829)        (239)
                                                                                   ---------    ---------
Total stockholders' (deficiency) equity ........................................      (5,880)      13,510
                                                                                   ---------    ---------
Total liabilities and stockholders' (deficiency) equity ........................   $  19,987    $  48,706
                                                                                   =========    =========
</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,
                                                                            ---------------------------------------
                                                                              2002            2001           2000
                                                                            ---------      ---------      ---------
<S>                                                                         <C>            <C>            <C>
Net revenues ........................................................       $  33,076      $  25,875      $  28,221
Operating expenses:
  Cost of goods sold, including depreciation of $1,866,
    $2,177 and 1,648, in 2002, 2001 and 2000, respectively ..........          15,277         13,342         12,838
  Selling, general and administrative expenses ......................          20,688         20,627         14,811
  Corporate expenses ................................................           6,123          8,163          6,041
  Depreciation and amortization .....................................             865          1,637          1,852
  Loss on impairment of assets ......................................           8,111          6,912           --
                                                                            ---------      ---------      ---------
Total operating expenses ............................................          51,064         50,681         35,542
                                                                            ---------      ---------      ---------

Loss from operations ................................................         (17,988)       (24,806)        (7,321)

Equity loss in investment ...........................................            --             --           (2,890)
Interest income .....................................................             450          2,131          1,617
Other income ........................................................            --             --               64
Interest expense ....................................................          (3,080)        (3,156)        (1,000)
                                                                            ---------      ---------      ---------
Loss before provision for income taxes ..............................         (20,618)       (25,831)        (9,530)
Provision for income taxes ..........................................             184            275            493
                                                                            ---------      ---------      ---------
Loss from continuing operations .....................................         (20,802)       (26,106)       (10,023)
  Loss from discontinued operations .................................            (587)       (47,744)       (39,865)
  (Loss)/gain on disposal of discontinued operations ................             877       (163,953)          --
                                                                            ---------      ---------      ---------
Net loss ............................................................       $ (20,512)     $(237,803)     $ (49,888)
                                                                            =========      =========      =========

Per share of common stock basic and diluted
  Loss from continuing operations ...................................       $   (0.68)     $   (0.89)     $   (0.47)
  Loss from operation of discontinued operations ....................       $   (0.02)     $   (1.63)     $   (1.89)
  (Loss)/gain on disposal of discontinued operations ................       $    0.03      $   (5.59)          --
                                                                            ---------      ---------      ---------
Net loss ............................................................       $   (0.67)     $   (8.11)     $   (2.36)
                                                                            =========      =========      =========

Weighted average basic and diluted common shares outstanding ........          30,414         29,334         21,111
                                                                            =========      =========      =========
</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,
                                                                        -----------------------------------
                                                                           2002         2001        2000
                                                                        ---------    ---------    ---------
<S>                                                                     <C>          <C>          <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss ...........................................................    $ (20,512)   $(237,803)   $ (49,888)
Adjustments to reconcile net loss to net cash used
in operating activities:
  Loss from discontinued operations ................................          587       47,744       39,865
  (Gain)/loss on disposal of discontinued operations ...............         (877)     163,953         --
  Net change in assets and liabilities of discontinued operations ..       (2,556)     (14,413)     (17,440)
  Bad debt expense .................................................          131         --            246
  Depreciation and amortization ....................................        2,731        3,814        3,500
  Loss on impairment of assets .....................................        8,111        6,912         --
  Loss on disposal of equipment ....................................          244           24         --
  Non-cash compensation ............................................         --           --            126
  Amortization of deferred financing costs .........................          815          750          181
  Amortization of original issue discount on Subordinated Notes ....          122           84           38
  Deferred rent ....................................................           (8)          13          106
Changes in assets and liabilities net of acquisitions:
  Accounts receivable ..............................................       (1,254)       2,296       (1,562)
  Inventory ........................................................           22       (1,135)        (619)
  Prepaid expenses .................................................          202          236          806
  Deposits, other current assets and restricted cash ...............          575        2,663       (2,774)
  Accounts payable .................................................         (792)       1,231         (999)
  Accrued employee compensation ....................................       (1,388)         860          334
  Accrued expenses .................................................          (86)         784         (399)
  Deferred revenues ................................................       (1,202)       1,086          106
                                                                        ---------    ---------    ---------
Net cash used in operating activities ..............................      (15,135)     (20,901)     (28,373)
                                                                        ---------    ---------    ---------

CASH FLOWS FROM INVESTING ACTIVITIES

Capital expenditures ...............................................       (1,410)      (1,795)      (3,238)
Proceeds from sale of equipment ....................................         --            167         --
Sale (purchase) of investments in marketable debt securities .......        5,655       19,534      (25,189)
Other assets .......................................................         --            390         (181)
Payment for business acquisitions, net of cash acquired ............       (1,050)        (100)        --
Additions to deferred financing costs ..............................         --           --           (494)
                                                                        ---------    ---------    ---------
Net cash provided by (used in) investing activities ................        3,195       18,196      (29,102)
                                                                        ---------    ---------    ---------

CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from sale of common stock and exercise of
  warrants and options .............................................         --            127       56,027
Repurchase of common stock .........................................         (590)        (239)
Net proceeds from issuance of warrants in connection
  with long-term debt ..............................................         --             35         --
Repayment of capitalized lease obligations .........................          (63)        (254)         (41)
Proceeds from long-term debt .......................................         --            965       13,551
Repayment of long-term debt ........................................       (1,737)      (1,234)        (876)
                                                                        ---------    ---------    ---------
Net cash provided by (used in) financing activities ................       (2,390)        (600)      68,661
                                                                        ---------    ---------    ---------

Net (decrease) increase in cash and equivalents ....................      (14,330)      (3,305)      11,186
Cash and equivalents at beginning of year ..........................       14,927       18,232        7,046
                                                                        ---------    ---------    ---------
Cash and equivalents at end of year ................................    $     597    $  14,927    $  18,232
                                                                        =========    =========    =========
</TABLE>

                                      F-5

<PAGE>

                        YouthStream Media Networks, Inc.
                Consolidated Statements of Cash Flows (continued)
                                 (In thousands)


<TABLE>
<CAPTION>

                                                                                 YEAR ENDED JUNE 30,
                                                                        -----------------------------------
                                                                           2002         2001        2000
                                                                        ---------    ---------    ---------
<S>                                                                     <C>          <C>          <C>
SUPPLEMENTAL CASH FLOW INFORMATION

Cash paid for interest ............................................     $   2,079    $   1,506    $   1,163
                                                                        =========    =========    =========
Cash paid for income taxes ........................................     $     148    $     252    $     184
                                                                        =========    =========    =========

NONCASH FINANCING ACTIVITIES:
Issuance of warrants in connection with long-term debt ............     $    --      $     162    $   2,926
                                                                        =========    =========    =========
Issuance of common stock in connection with acquisitions ..........     $   1,712    $   6,814    $ 197,183
                                                                        =========    =========    =========
Deferred purchase price in connection with acquisition of Invino ..     $    --      $    --      $   3,500
                                                                        =========    =========   ==========
Issuance of warrants in connection with acquisitions ..............     $    --      $    --      $  18,512
                                                                        =========    =========    =========
Assets acquired under capital lease ...............................     $     155    $    --      $    --
                                                                        =========    =========    =========
</TABLE>

                 See notes to consolidated financial statements.

                                      F-6

<PAGE>

                        YouthStream Media Networks, Inc.
     Consolidated Statements of Changes in Stockholders' (Deficiency) Equity
                                 (In thousands)

<TABLE>
<CAPTION>

                                                        COMMON STOCK     ADDITIONAL    ACCUMU-
                                                    -------------------   PAID-IN       LATED      TREASURY
                                                     SHARES     AMOUNT    CAPITAL      DEFICIT       STOCK        TOTAL
                                                   ----------------------------------------------------------------------
<S>                                                  <C>       <C>       <C>          <C>             <C>       <C>
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 of stock
  options                                                45         --         127         --           --            127
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
-------------------------------------------------------------------------------------------------------------------------
Issuance of common stock in connection with
  acquisition of Invino                               3,041         30       1,124                                  1,154
Issuance of common stock in connection with
  acquisition of Trent                                  458          5         553                                    558
Issuance of common stock in connection with
  acquisition of sixdegrees                               1         --
Stock repurchase                                       --           --        --           --         (590)          (590)
Net loss                                                                                (20,512)        --        (20,512)
-------------------------------------------------------------------------------------------------------------------------
Balances at June 30, 2002                            33,591    $   336   $ 330,774    $(336,161)   $  (829)     $  (5,880)
-------------------------------------------------------------------------------------------------------------------------
</TABLE>

                 See notes to consolidated financial statements.

                                      F-7

<PAGE>

                           YOUTHSTREAM MEDIA NETWORKS
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2002

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"), Beyond the Wall, Inc., formerly Trent Graphics, Inc. ("Trent" or
"Beyond the Wall"), 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"). In December, 2001 the Company discontinued its
Teen.com operations and closed its Hotstamp college business. (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 adults ages 12 to 24. During fiscal 2001, YouthStream
reorganized into two market segments: media and retail.

FINANCIAL STATEMENT PRESENTATION

The Company has incurred recurring operating losses since its inception, as of
June 30, 2002 had an accumulated deficit of $336,000,000 and expects to have
insufficient capital to fund all of its obligations. In August and September
2002, the Company defaulted on approximately $18,000,000 of its long-term debt
(see Note 6 - Long-Term Debt). In addition, the Company's retail sales have been
on the decline. These conditions raise substantial doubt about the Company's
ability to continue as a going concern. The financial statements do not include
any adjustments to reflect the possible future effect of the recoverability and
classification of assets or the amounts and classifications of liabilities that
may result from the outcome of this uncertainty. The Company is also exploring
strategic alternatives with respect to its business which could include seeking
to dispose of some or all of its remaining assets on terms favorable to the
Company. The Company believes that consummation of a disposition of all or
substantially all of the assets associated with the retail business segment,
would require a vote of the Company's shareholders.

Sale of Media Assets

In response to its liquidity issues and declining earnings, on August 5, 2002,
following the close of the Company's fiscal year 2002, the Company sold
substantially all of its Media assets and assigned certain liabilities to Cass
Communications, Inc., a subsidiary of Alloy, Inc. for proceeds of $7,000,000,
which approximated the carrying value of the Media segment at the time of sale.
As of June 30, 2002 the Media segment's assets and liabilities are classified as
held and used as the criteria to be held for sale under SFAS No. 144 were not
met prior to June 30, 2002. As a result of the sale the Media segment
operations will be discontinued in fiscal 2003.

The following is a summary of the major classes of assets and liabilities as of
June 30, 2002 that will be included as part of the disposal group in August
2002:

                                                  June 30, 2002
                                                 (In thousands)
                                                 --------------
     Current assets .........................         $  3,627
     Fixed assets, net ......................            1,781
     Intangibles and other assets, net ......            4,958
     Current liabilities ....................          (2,895)
     Capitalized lease obligations ..........            (139)

                                                 --------------
     Net book value .........................         $  7,332
                                                 ==============

Management is in the process of developing plans, with assistance from outside
consultants including the Company's accountants and legal advisors, to seek to
make arrangements with creditors with respect to the restructuring of the debt
and other liabilities of the Company and its subsidiaries. There can be no
assurance that the Company will succeed in effecting a restructuring that will
enable it or its subsidiaries to avoid the necessity of seeking bankruptcy
protection.


                                      F-8

<PAGE>


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, was classified as securities
held-to-maturity and was 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. On July 11, 2002 approximately $500,000 became
unrestricted.

RECLASSIFICATIONS

Certain amounts in the prior year financial statements have been reclassified to
conform to the current year presentation.

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, 2002 and 2001
are approximately $1,920,000 and $1,105,000, 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 six years for
location-based media equipment and three to five years for furniture and office
equipment. Prior to its impairment in May 2002 (see Note 7 - Loss on Impairment
of Assets), the NET equipment was estimated to have a useful life of three to
five years. 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.

Prior to July 2001 and in accordance with Financial Accounting and Standards
Board ("FASB") Statement of Financial Accounting Standards ("SFAS") No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of," the Company recorded impairment losses on long-lived assets
used in operations when events and circumstances indicated that the assets might
be impaired and the undiscounted cash flows estimated to be generated by those
assets were less than the carrying amount of those assets. In July 2001, the
Company adopted FASB Statement No. 144, "According for the Impairment or
Disposal of Long-Lived Assets" which superceded SFAS No. 121. SFAS No. 144
retains the fundamental provisions of SFAS No. 121 for recognition and
measurement of impairment (See further discussion below - Impact of Recently
Issued Accounting Standards).

INTANGIBLE ASSETS

Intangible assets are primarily comprised of goodwill, which represents
acquisition costs in excess of the net assets of businesses acquired. Prior to
July 1, 2001, intangible assets were amortized on the straight-line basis
ranging from 3-15 years. Effective July 1, 2001, the Company adopted SFAS No.
142, "Goodwill and Other Intangible Assets." SFAS No. 142 requires goodwill to
be tested for impairment on an annual basis, between annual tests in certain
circumstances, and written down when impaired, rather than being amortized as
previous accounting standards required. (See further discussion below - Impact
of Recently Issued Accounting Standards).

                                      F-9

<PAGE>

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, 2002, 2001 and 2000 was
approximately $135,000, $687,000 and $263,000, respectively.

INCOME TAXES

The Company accounts for income taxes in accordance with Financial Accounting
Standards Board 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 relevant 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.

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 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. SFAS No. 141
addresses the initial recognition and measurement of goodwill and other
intangible assets acquired in a business combination. SFAS No. 141 is applicable
to business combinations beginning July 1, 2001.

In June 2001, the FASB issued SFAS No. 142. SFAS No. 142 addresses the
recognition and measurement of goodwill and other intangible assets subsequent
to their acquisition. SFAS No. 142 also addresses the initial recognition and
measurement of intangible assets acquired outside of a business combination
whether acquired individually or with a group of other assets. SFAS No. 142 is

                                      F-10

<PAGE>

effective for fiscal years beginning after December 15, 2001; however, the
Company elected to early-adopt the accounting standard effective at the
beginning of fiscal 2002. In accordance with SFAS No. 142, the Company ceased
amortizing goodwill. At June 30,2001 accumulated amortization of intangible
assets was $2,861,000. As defined by SFAS No. 142, the Company identified two
reporting units, retail and media, which constitute components of the Company's
business. The Company was required to complete, within six months from adoption,
a transitional impairment test that required that the company make a fair value
determination of its components of its business as of July 1, 2001. The Company
performed the transitional impairment test, and determined at that time that no
impairment was required. In conducting its annual impairment test during the
quarter ending June 30, 2002 the Company determined that the value of its
recorded goodwill related to its Retail segment was impaired. (see Note 7 - Loss
on Impairment of Assets).

Had the Company accounted for its goodwill under SFAS No. 142 for all periods
presented, the Company's net loss and loss per share would have been as follows
(in thousands except per share amounts):

<TABLE>
<CAPTION>

                                                                    Year ended June 30,
                                                        ------------------------------------------------
                                                              2002            2001             2000
                                                        ------------------------------------------------
<S>                                                        <C>            <C>               <C>
     Reported net loss ............................        $ (20,512)     $ (237,803)       $  (49,888)
     Add back goodwill amortization ................            --            41,277            31,633
                                                        ------------------------------------------------
     Adjusted net loss .............................       $ (20,512)     $ (196,526)       $  (18,255)
                                                        ================================================

     Basic and diluted earnings per share:
     Reported net loss .............................       $   (0.67)      $   (8.11)        $   (2.36)
     Goodwill amortization .........................            --         $    1.41         $    1.50
                                                        ------------------------------------------------
     Adjusted net loss .............................       $   (0.67)      $   (6.70)        $   (0.86)
                                                        ================================================
</TABLE>

In August 2001, the FASB issued SFAS No. 144, which addresses financial
accounting and reporting for the impairment or disposal of long-lived assets and
supersedes SFAS No. 121, and the accounting and reporting provisions of APB
Opinion No. 30, "Reporting the Results of Operations" for a disposal of a
segment of a business. The Company elected early adoption of SFAS No. 144 as of
July 1, 2001. As a result of the adoption of SFAS No. 144, the disposal of
Teen.com, which was not a separate segment of the Company, qualified as a
discontinued operation (see Note 3 - Discontinued Operations). In addition, in
2002 events and circumstances indicated that the company's Network Theater
Equipment and certain other location based Media equipment was impaired. As
such, in accordance with the adoption of SFAS No.144, the Company wrote down the
value of these assets to their fair value. (see Note 7 - Loss on Impairment of
Assets).

In April 2002, the FASB issued SFAS No. 145, "Recision of SFAS Nos. 4, 44 and
64, Amendment of SFAS 13, and Technical Corrections as of April 2000. SFAS No.
145 revises the criteria for classifying the extinguishment of debt as
extraordinary and the accounting treatment of certain lease modifications. SFAS
145 is effective in fiscal 2003, and is not expected to have a material impact
on the Company's consolidated financial statements.

In July 2002, the FASB issued SFAS No. 146 "Accounting for Costs Associated with
Exit or Disposal Activities." SFAS No. 146 provides guidance on the timing of
the recognition of costs associated with exit or disposal activities. The new
guidance requires costs associated with exit or disposal activities to be
recognized when incurred. Previous guidance required recognition of costs at the
date of commitment to an exit or disposal plan. The provisions of the statement
are to be adopted prospectively after December 31, 2002. Although SFAS No. 146
may impact the accounting for costs related to exit or disposal activities the
Company may enter into in the future, particularly the timing of the recognition
of these costs, the adoption of the statement will not have an impact on the
Company's present financial condition or results of operations.

3. DISCONTINUED OPERATIONS

In December 2001, the Company discontinued its Teen.com website. In connection
with the discontinuance of this business, the Company incurred a one-time charge
of $348,000, related primarily to the write-off of property and equipment and an
accrual for severance. In December 2000, the Company announced its decision to
discontinue the online segment, including operations of the 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

                                      F-11

<PAGE>

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 APB No. 30. The
discontinuation of Teen.com, sixdegrees and the disposal of the ASP business
have been classified as discontinued and prior periods have been restated.

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

<TABLE>
<CAPTION>

                                                       Year ended        Year ended           Year ended
                                                      June 30, 2002     June 30, 2001        June 30, 2000
                                                      ----------------------------------------------------
<S>                                                     <C>              <C>                  <C>
Net revenues ....................................       $     142        $     1,415          $     818
                                                      ====================================================

Gain (loss) from discontinued operations ........       $    (587)       $   (47,744)         $ (39,865)
Gain (loss) on disposal of
   discontinued operations.......................             877           (163,953)              --
                                                      ----------------------------------------------------

Net gain (loss) from discontinued operations ....       $     290        $  (211,697)         $ (39,865)
                                                      ====================================================
</TABLE>

The gain on the disposal of discontinued operations for the year ended June 30,
2002 of $877,000, net of $348,000 related to the discontinuance of Teen.com, was
derived primarily from the favorable settlement of a capitalized equipment lease
obligation relating to sixdegrees and an office lease obligation relating to
Common Places. The Company also realized gains as a result of the issuance of
the settlement of certain deferred purchase price liabilities. These
transactions related to discontinued businesses.

As of June 30, 2002, the Company has accrued liabilities of $736,000 remaining
from its discontinued businesses. The accrual primarily consists of severance,
lease payments and other miscellaneous expenses.

4. REORGANIZATION

The Company announced its plan to move the Seattle operations to the New York
office in March 2002. In April 2002, the Company finalized its transition plan,
which resulted in the termination of 30 employees, and completed the transition
in June 2002. The Company recorded a restructuring charge, which is included in
selling, general and administrative expenses, in fiscal 2002 of approximately
$519,000 relating to this decision, which included severance costs of $186,000,
lease costs of $126,000 for a lease expiring November 2002, and $207,000
relating to the abandonment of certain fixed assets. As of June 30, 2002 the
Company has remaining accruals of approximately $325,000 for severance and lease
obligation costs.

                                      F-12

<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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, retail stores, 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 had accrued an additional
$991,000 relating to the modified earnouts. Such amount was paid in cash during
2002. The aggregate purchase price of $8,218,000, including acquisition costs,
was recorded as excess of cost over net assets acquired. The amount was
determined to be impaired as of June 2002. (see Note 7 - "Loss on Impairment of
Assets")

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, except for a portion that 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)

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 September 30, 2002.
Through June 30, 2002, the Company issued an additional 4,126,394 shares valued
at approximately $3,802,000 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

                                      F-13

<PAGE>

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 an 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 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)

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
was a family-friendly Web destination for teens and was 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. In December 2001 the Company discontinued its
Teen.com operations. (see Note 3 - Discontinued Operations)

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.

                                      F-14

<PAGE>

6. LONG-TERM DEBT

Long-term debt consists of the following (in thousands):

<TABLE>
<CAPTION>

                                                                                    Year ended June 30,
                                                                                   ---------------------
                                                                                     2002         2001
                                                                                   --------     --------
<S>                                                                                <C>          <C>
      Note Payable to Bank (A) ..............................................      $   --       $  1,072
      Subordinated Notes - Private Placement (B) - in default ...............         5,000        5,000
      Note Payable to Finance Company (C) - in default ......................           496        1,169
      Subordinated Notes - Private Placement (D) - in default ...............        12,000       12,000
      Subordinated Notes - Private Placement (E) - in default ...............         1,000        1,000
      Other .................................................................             1            6
                                                                                   --------     --------
                                                                                     18,497       20,247
      Less unamortized original issue discount attributed
        to subordinated notes ...............................................           313          448
                                                                                   --------     --------
                                                                                     18,184       19,799
      Less current portion ..................................................        18,184        1,169
                                                                                   --------     --------
                                                                                   $   --       $ 18,630
                                                                                   ========     ========
</TABLE>

(A) On January 15, 2002, the Company repaid the loan and retired the interest
rate exchange agreement. This loan was secured by all of the assets of Campus
Voice, Beyond the Wall and American Passage (the "Borrowers") and was guaranteed
by the Company. This loan was payable in equal monthly installments, commencing
in February 1998, over a maximum of six years. Interest was payable monthly at a
rate of interest of 275 basis points above LIBOR for U.S. dollar deposits of one
month maturity. The Borrowers were also party to an interest rate exchange
agreement originally converting $3.0 million of the aforementioned floating rate
debt to a fixed rate. Under the interest rate exchange agreement, the Borrowers
were 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 received
interest payments on the same notional amount at the prevailing LIBOR rate plus
275 basis points.

(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
("NET Notes"). 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. On September 8, 2002 NET failed to
make the interest payment due on the NET Notes, constituting an event of default
under the terms of the NET Notes. In September 2002, the holder of a majority of
the NET Notes declared these notes due and payable under the terms of the NET
Notes.

(C) In March 2000, the Company issued a note to a finance company in the amount
of $1,971,000 ("Equipment Note"). 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 NET.

NET failed to make payments of approximately $65,000 due on August 1, 2002 and
$65,000 due on September 1, 2002, in connection with the Equipment Note. On
September 6, 2002, NET received notice from the finance company holding the
Equipment Note stating that the entire outstanding indebtedness under the
Equipment Note is due and payable pursuant to the terms of the note. On
September 16, 2002, the holder of the Equipment Note commenced litigation
against NET seeking repayment of the note.

(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 ("YSTM Note"). 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.
On August 31, 2002 the Company failed to make an interest payment due on the
YSTM Note, constituting an event of default under the terms of the YSTM Note. On
September 9, 2002 the holder of the YSTM Note declared this note due and
payable under the terms of the YSTM Note.

                                      F-15

<PAGE>

(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
("YSTM 2 Note"). 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. On August 31, 2002 the Company failed to make
an interest payment due on the YSTM 2 Note, constituting an event of default
under the terms of the YSTM 2 Note. Under the terms of the YSTM 2 Note, the
holder of the note has the right to declare this note immediately due and
payable.

7. LOSS ON IMPAIRMENT OF ASSETS

Operating results at the Company's Trent subsidiary declined during 2002. In the
fourth quarter of 2002, the Company evaluated the recoverability of the goodwill
of this subsidiary in accordance with its accounting policy. This evaluation
indicated that the carrying value of the goodwill of this subsidiary was
impaired. As a result, in 2002, the Company recorded goodwill impairment charges
totaling $7,439,000 in the Retail segment. In addition, the Company determined
during fiscal year 2002 that the fixed assets related to its satellite network
was impaired as the Company decided to use alternative means of showing movies
on college campuses for the 2003 season. In May 2002 the Company recognized a
charge of $672,000 of impairment on these fixed assets which were recorded on
NET within the Media segment. The aforementioned charges have been recorded as a
loss on impairment of assets in the statement of operations for the year ended
June 30, 2002.

In fiscal 2001, the Company conducted a strategic review of certain operations
in the Media segment. Upon completion of this review, the company determined
that the fair market values of the goodwill and certain other long-lived assets
for Beyond the Wall and HotStamp were below their carrying values. As a result,
the Company recorded an impairment charge of $2,162,000. Additionally, the
Company determined that it was unlikely that $4,750,000 of a prepaid marketing
asset would ever be utilized. Such amount was recorded as a charge as of June
30, 2001. The afore mentioned charges have been recorded as a loss on impairment
of assets in the statement of operations for the year ended June 30, 2001.

8. PROPERTY AND EQUIPMENT

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

                                                               JUNE 30,
                                                         --------------------
                                                           2002        2001
                                                         --------    --------
Network theater equipment ............................   $   --      $  4,051
Location based media equipment .......................      2,847         882
Furniture and office equipment .......................      3,909       6,073
Leasehold improvements ...............................        678         775
Building .............................................        493         488
Land .................................................        130         130
                                                         --------    --------
                                                            8,057      12,399
Less accumulated amortization and depreciation .......    (3,497)     (5,787)
                                                         --------    --------
                                                         $  4,560    $  6,612
                                                         ========    ========

Property and equipment include assets under capital leases aggregating
approximately $155,000 and $189,000 at June 30, 2002 and 2001, respectively. The
accumulated amortization related to assets under capital leases is approximately
$18,000 and $96,000 at June 30, 2002 and 2001, respectively.

9. INCOME TAXES

At June 30, 2002, the Company had a net operating loss carryforward for income
tax purposes of approximately $101,506,000 that expires from 2013 through 2022.
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 $41,347,000 has been recognized to offset

                                      F-16

<PAGE>

the net deferred tax asset principally related to this carryforward. The
valuation allowance increased by approximately $10,646,000 and $9,803,000 for
the years ended June 30, 2002 and 2001, 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, 2002 are as follows: (in
thousands)

                                                    Year ended June 30,
                                                -----------------------------
                                                    2002              2001
                                                -----------------------------
     Net operating loss carryforwards ......     $ 40,501           $ 32,856
     Other .................................          846             (2,155)
                                                -----------------------------
     Total deferred tax assets .............       41,347             30,701
     Valuation allowance ...................      (41,347)           (30,701)
                                                -----------------------------
     Net deferred tax asset ................     $   --             $   --
                                                =============================

No federal tax provision has been provided for the years ended at June 30, 2002
and 2001 due to the significant losses incurred to date. A current state tax
provision has been provided for at June 30, 2002 and 2001 in the amount of
$184,000 and $275,000 respectively. These taxes are primarily based on net
assets and net revenues.

10. STOCKHOLDERS' (DEFICIENCY) 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 the year ended June 30, 2000,
issued 460,280 shares of common stock in connection with the exercise of the
last of such options.

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. 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. The remainder of the warrants
expired in April 2002.

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.

The July 1999 Trent acquisition agreement provided for additional consideration
for the purchase contingent upon Trent meeting certain targets as defined in the
merger agreement (as amended). Accordingly, those targets were met and on
September 30, 2001 the Company issued 458,000 shares of the Company's common
stock, valued at $558,000, and paid $600,000 in cash. The additional purchase
price of $1,158,000 was recorded as additional goodwill.

                                      F-17

<PAGE>

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 $2,000,000. As of June
30, 2002, the Company purchased, on the open market, 607,000 shares at a cost of
$829,000.

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

                                                       As of June 30
                                          ----------------------------------
                                              2002        2001       2000
                                          ----------------------------------
     Stock options .....................    1,882,013  3,942,021   3,595,547
     Common stock purchase warrants ....    1,462,000  1,462,000   1,402,000

11. 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 an 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.

In May 2001, the Company approved a Voluntary Stock Option Exchange Program to
be carried out under the Company's 2000 Stock Incentive Plan. Employees were
given the option to exchange all or a portion of their options on July 20, 2001,
with an exercise price equal to or greater than $9.00. In exchange, employees
were eligible to receive, six months and one day after cancellation, new options
for 80% of the number of shares covered by the cancelled options, with an
exercise price equal to the fair market value of the Company's stock on the date
of the new grant. On July 20, 2001, 743,800 options were cancelled, and 518,319
options were reissued on January 22, 2002.

                                      F-18

<PAGE>

The following table summarizes the Option Plan and the effects from the
execution of the Voluntary Stock Option Exchange Program initiated in May 2001:

<TABLE>
<CAPTION>

                                                                                             Weighted
                                                                                              Average
                                                                         Shares        Exercise Price
                                                                   -----------------------------------
<S>                                                                      <C>                   <C>
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 granted .............................................          1,097,652                 1.32
Options canceled ............................................         (3,157,660)                7.88
Options exercised ...........................................              --                      --
                                                                   -----------------------------------
Options outstanding at June 30, 2002 ........................          1,882,013               $ 2.53
                                                                   ===================================

Options exercisable at June 30, 2002 ........................          1,379,644
                                                                   ==============
Options exercisable at June 30, 2001 ........................          1,483,260
                                                                   ==============
Options available for future grant at June 30, 2002 .........          2,990,110
                                                                   ==============
</TABLE>

Information regarding the options outstanding under the Option Plan at June 30,
2002 is as follows:

<TABLE>
<CAPTION>

                                   Number of       Weighted-    Weighted-
                                    Options         Average      Average
          Exercise Price           Currently       Exercise    Contractual       Number           Average
              Range               Outstanding        Price        Life         Exercisable    Exercise Price
         ---------------------------------------------------------------------------------------------------
<S>                                  <C>            <C>        <C>             <C>                <C>
         $ 0.78- 1.01 ........       22,499         $ 0.90     8.5 years          15,831          $ 0.92
         $ 1.17- 1.21 ........       90,000         $ 1.17     9.6 years          40,000          $ 1.19
         $ 1.22- 1.30 ........      601,235         $ 1.23     9.5 years         459,920          $ 1.27
         $ 1.32- 1.57 ........      361,113         $ 1.50     8.6 years         153,044          $ 1.46
         $ 1.63- 1.88 ........      348,095         $ 1.69     8.6 years         324,761          $ 1.72
         $ 3.00- 3.50 ........       32,332         $ 3.10     7.6 years          32,332          $ 3.25
         $ 3.56- 5.00 ........       47,082         $ 4.81     7.7 years          46,248          $ 4.35
         $ 5.42- 6.94 ........      344,432         $ 6.01     7.9 years         273,925          $ 6.01
         $ 7.00- 9.04 ........       31,050         $ 8.95     7.6 years          30,383          $ 8.02
         $13.06-19.69 ........        4,175         $19.12     7.6 years           3,200          $16.38
                                  ---------                                    ---------          ------
                                  1,882,013                                    1,379,644          $ 9.57
                                  =========                                    =========          ======
</TABLE>

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, 2002, 2001
and 2000:

<TABLE>
<CAPTION>

                                                                        JUNE 30,
                                                       ----------------------------------------
                    ASSUMPTION                            2002            2001           2000
                    ----------                         ---------       ---------      ---------
<S>                                                    <C>             <C>            <C>
Risk-free interest rate ..........................         3.82%           4.99%          6.41%
Dividend yield ...................................            0%              0%             0%
Volatility factor of the expected market
  price of the Company's common stock ............         1.060           1.223          0.900
Average life .....................................     3.0 years       2.4 years      3.0 years
</TABLE>

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

                                      F-19

<PAGE>

opinion, the existing models do not necessarily provide a reliable single
measure of the fair value of its 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 2000 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 $5,076,000, or $0.17 per share, and $7,890,000,
or $0.27 per share, and $2,659,000, or $0.13 per share, for the years ended June
30, 2002, 2001 and 2000, respectively.

The weighted average fair value of options granted during the years ended June
30, 2002, 2001 and 2000 was $0.88, $1.49 and $8.10, respectively.

12. 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 2.9% to 25.0%. Future minimum lease payments relating to office
space under noncancelable operating leases and future minimum capital lease
payments as of June 30, 2002 are as follows (in thousands):

<TABLE>
<CAPTION>

                                                                             CAPITAL       OPERATING
                                                                              LEASES         LEASES
                                                                           -------------------------
<S>                                                                            <C>           <C>
   2003 ................................................................       $ 204         $2,368
   2004 ................................................................          72          1,507
   2005 ................................................................          43          1,058
   2006 ................................................................          36            563
   2007 ................................................................          15              1
                                                                           -------------------------
Total minimum lease payments ...........................................         370         $5,497
                                                                                        ============
   Less amount representing interest ...................................         (35)
                                                                           ----------
   Present value of net minimum capital lease payments .................         335
   Less current installments of obligations under capital lease ........         184
                                                                           ----------
   Obligations under capital leases, net of current installments .......       $ 151
                                                                           ==========
</TABLE>

Rent expense was approximately $3,313,000, $2,524,000 and $1,281,000 for the
years ended June 30, 2002, 2001 and 2000, respectively. At June 30, 2002,
approximately $154,000 and $38,000 of short-term capital lease obligations and
long-term capital lease obligations, respectively, are reclassified to current
and long term liabilities of 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.

OTHER

In April 2002 the Company entered into an agreement with Mr. Roche, the
Company's president at that time, which provided that upon closing a sale of the
Company's media assets under certain conditions, he would be entitled to a
$200,000 bonus.

In May 2002, the Company entered into an agreement with Libra Securities, LLC to
act as its and NETS's exclusive financial advisor and agent will respect to any
repurchase of the YSTM note or the NET Notes, in exchange for an advisory fee
equal to 50% of any discount realized by the Company or NET upon closing of the
repurchase, plus reasonable costs and expenses.

LITIGATION

The Company is a party to certain legal proceedings commenced against it by
former employees of the Company's subsidiaries. These actions include: (a) a
litigation pending in the District Court of Travis County, Texas by a former
employee of the Company's CommonPlaces, LLC ("CP") subsidiary claiming that he
is entitled to receive, without cost, an aggregate of 215,083 shares of
YouthStream common stock; (b) a litigation filed in the U.S. District Court for
the District of Massachusetts, by a former CP employee seeking damages based on
claims for breach of his employment contract, breach of implied covenants of
good faith, and violation of the Massachusetts unfair and deceptive trade
practices act; and (c) an arbitration filed in New York by the Company's former
President and Chief Executive Officer seeking damages for alleged breach of his
employment agreement, among other things. The Company is currently defending
these actions and has asserted counterclaims against the plaintiffs in two of
these actions.

                                      F-20

<PAGE>

In addition, certain creditors of the Company and its subsidiaries and certain
holders of the Company's and its NET subsidiary's debt have asserted or have
threatened claims against the Company and its subsidiaries, which are the result
of the Company's failure to pay certain debts and liabilities as they came due.

In addition, certain landlords of stores which Beyond the Wall has vacated or
failed to pay rent when due have commenced litigation against Beyond the Wall.

Given the Company's current financial situation, the costs of defending these
proceedings, diversion of management's attention to these matters, or the
outcome of such proceedings could have a material adverse effect on the
Company's financial condition or operating results, including its ability to
restructure its debts without seeking bankruptcy protection or being the subject
of an involuntary bankruptcy petition, or its ability to continue as a going
concern.

13. 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, 2002, 2001 and 2000, the amount of this matching expense was
approximately $51,000, $163,000 and $74,000, respectively.

14. SEGMENT INFORMATION

The Company operates in two segments -media and retail. The media segment
represents the Company's media, marketing and promotional services provided to
advertisers by NET, American Passage, Campus Voice and Beyond the Wall. The
retail segment consists of on-campus and retail store poster sales provided by
Trent.

<TABLE>
<CAPTION>

                                       YEAR ENDED                       YEAR ENDED                       YEAR ENDED
                                      JUNE 30, 2002                    JUNE 30, 2001                   JUNE 30, 2001
                             -------------------------------------------------------------------------------------------------
                               Media     Retail      Total      Media     Retail      Total      Media     Retail     Total
                             -------------------------------------------------------------------------------------------------
<S>                           <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>       <C>
Net revenues .............    $ 18,116   $ 14,960   $ 33,076   $ 15,848   $ 10,027   $ 25,875   $ 20,560   $ 7,661   $ 28,221
Depreciation and
amortization .............       2,162        569      2,731      3,131        683      3,814      2,930       570      3,500
                             -------------------------------------------------------------------------------------------------
Loss from operations .....     (10,011)    (7,977)   (17,988)   (21,685)    (3,121)   (24,806)    (6,761)     (560)    (7,321)
                             =================================================================================================

Capital expenditures .....         505        903      1,408      1,097        698      1,795      1,968     1,270      3,238
                             =================================================================================================

<CAPTION>

                                           JUNE 30, 2002                               JUNE 30, 2001
                             -------------------------------------------------------------------------------------------------
                               Media     Retail      Corp       Total      Media     Retail      Corp      Total
                             -------------------------------------------------------------------------------------------------
<S>                           <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>       <C>
Identifiable assets ......    $ 10,284   $  5,222   $  4,481   $ 19,987   $ 20,497   $ 10,827   $ 17,382   $48,706
</TABLE>

                                      F-21

<PAGE>

15. QUARTERLY RESULTS (UNAUDITED)

The following is a summary of the quarterly results of operations for the two
years ended June 30, 2002 (in thousands except per share data):

<TABLE>
<CAPTION>

                                                             June 30,      March 31,       December 31,    September 30,
                                                               2002          2002             2001             2001
                                                          ------------------------------------------------------------
<S>                                                         <C>            <C>             <C>               <C>
Net revenues .........................................      $   5,053      $   7,313       $    8,026        $  12,684
Income (loss) from operations ........................        (13,033)        (3,650)          (2,421)           1,116
Income (loss) before provision for income taxes ......        (13,819)        (4,270)          (3,055)             526
Loss from continuing operations ......................        (13,826)        (4,402)          (3,093)             519
Income (loss) from discontinued operations ...........             79             --             (365)            (301)
Income (loss) on disposal of discontinued
  operations .........................................            864            303             (348)              58
                                                          ------------------------------------------------------------
Net income (loss) ....................................      $ (12,883)     $  (4,099)      $   (3,806)       $     276
                                                          ============================================================
Per share of common stock basic and diluted
  Income (loss) from continuing operations ...........      $   (0.45)     $   (0.14)      $    (0.10)       $    0.01
  Loss from discontinued operations ..................            --              --            (0.02)              --
  Income (loss) on disposal of discontinued
    operations .......................................      $    0.03           0.01            (0.01)              --
                                                          ------------------------------------------------------------
Net income (loss) ....................................      $   (0.42)     $   (0.13)      $    (0.13)       $    0.01
                                                          ============================================================

Weighted average basic shares outstanding ............         30,969         30,505           30,270           29,992
                                                          ============================================================
Weighted average diluted shares outstanding ..........         30,969         30,505           30,270           30,027
                                                          ============================================================

<CAPTION>

                                                             June 30,      March 31,      December 31,     September 30,
                                                               2001          2001            2000              2000
                                                          ------------------------------------------------------------
<S>                                                         <C>            <C>             <C>               <C>
Net revenues .........................................      $   3,031      $   5,560       $    6,968        $  10,316
Loss from operations .................................        (14,985)        (4,251)          (3,711)          (1,859)
Loss before provision for income taxes ...............        (15,363)        (4,616)          (3,969)          (1,883)
Loss from continuing operations ......................        (15,217)        (4,737)          (4,041)          (2,111)
Loss from discontinued operations ....................         (4,652)        (1,025)         (16,966)         (25,101)
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 ...............      $   (0.52)     $   (0.16)      $    (0.14)       $   (0.07)
       Loss from discontinued operations .............          (0.15)         (0.04)           (0.58)           (0.86)
       Loss on disposal of discontinued operations ...      $    0.03             --            (5.66)              --
                                                          ------------------------------------------------------------
Net Loss .............................................      $   (0.64)     $   (0.20)      $    (6.38)       $   (0.93)
                                                          ============================================================
Weighted average basic and diluted shares
  outstanding ........................................         29,438         29,481           29,172           28,897
                                                       =============== ============== ================ ===============
</TABLE>

                                      F-22

<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/ Jonathan Diamond
                                        ---------------------------
                                              Jonathan Diamond
                                              Interim Chief Executive Officer

Date:    September 30, 2002

     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/ JONATHAN DIAMOND
-----------------------------        Interim Chief Executive Officer and                September 27, 2002
   JONATHAN DIAMOND                  Director (Principal Executive Officer)

/s/ WESLEY RAMJEET
-----------------------------        Acting Chief Financial Officer                     September 27, 2002
   WESLEY RAMJEET                    (Principal Financial & Accounting Officer)

/s/ HARLAN D. PELTZ
-----------------------------        Chairman                                           September 27, 2002
   HARLAN D. PELTZ

/s/ HOWARD KLEIN
-----------------------------        Director                                           September 27, 2002
   HOWARD KLEIN

/s/ METIN NEGRIN
-----------------------------        Director                                           September 27, 2002
   METIN NEGRIN

/s/ SIDNEY I. LIRTZMAN
-----------------------------        Director                                           September 27, 2002
   SIDNEY I. LIRTZMAN


-----------------------------        Director                                           September 27, 2002
   JAMES G. LUCCHESI

/s/ G. KELLY O'DEA
-----------------------------        Director                                           September 27, 2002
   G. KELLY O'DEA


-----------------------------        Director                                           September 27, 2002
   BRUCE SLOVIN


</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
                                                          Beginning of    Costs and      Accounts-      Deductions-   at End of
                      Description                            Period        Expenses      Describe        Describe      Period
--------------------------------------------------------------------------------------------------------------------------------
<S>                                                           <C>            <C>                           <C>         <C>
Year ended June 30, 2002
  Reserves and allowances deducted from asset
    accounts:
      Allowance for uncollectible accounts ............       $171           $131                          $126        $176

Year ended June 30, 2001
  Reserves and allowances deducted from asset
    accounts:
      Allowance for uncollectible accounts ............       $404             --             --           $233        $171

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

</TABLE>

                                      S-2