SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-KSB

(Mark One)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
       EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2001
OR
[  ]	TRANSITION REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE 	SECURITIES EXCHANGE ACT OF
1934 Commission file number 0-11968

COSMO COMMUNICATIONS CORPORATION
(Exact name of small business issuer as specified in its charter)

          Florida                    59-2268005
	(State or other jurisdiction        (I.R.S. Employer
 of incorporation or organization)     Identification No.)

106 Ferrier Street, Markham, Ontario, Canada
(Address of principal executive offices)
Registrant's telephone number, including area code: (905) 940-0560
Securities registered pursuant to Section 12 (b) of the Exchange Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.05 par value
(Title of Class)

Check whether the registrant (1) filed all
reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such
shorter period that the registrant was required
to file such reports), and (2) has been subject
to such filing requirements for the past 90
days. Yes_ No X
Check if there is no disclosure of delinquent
filers pursuant to Item 405 of Regulation S-B
is not 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.    ___
The registrant's revenues for the fiscal year
ended December 31, 2001 were $10,425,000.
As of March 31, 2002, the market value of the
registrant's Common Stock held by non-
affiliates of the registrant was not able to be
determined as there were no quotes on the bid
and ask price of the Company's common stock.
The number of shares outstanding of the
registrant's common stock is  29,104,066 as of
March 28, 2002.


Documents Incorporated by Reference
None.

PART I

Forward-Looking Statements and Associated Risk

This annual report of Cosmo Communications
Corporation (the "Company") contains forward-
looking statements within the meaning of
Section 21E of the Securities Exchange Act of
1934, including statements regarding, among
other items, (i) the Company's growth
strategies, (ii) anticipated trends in the
consumer electronics industry, and (iii) the
Company's ability to obtain and maintain
adequate financing for its operations.  These
forward-looking statements are based largely on
the Company's expectations and are subject to a
number of risks and uncertainties, certain of
which are beyond the Company's control.  Actual
results could differ materially from these
forward-looking statements as a result of such
uncontrollable factors, including, among
others, general economic conditions,
governmental regulation and competitive
factors, and, more specifically, interest rate
levels, availability of financing, consumer
confidence and preferences, the effectiveness
of the Company's competitors, and costs of
materials and labor.  In light of these risks
and uncertainties, there can be no assurance
that the forward-looking information contained
in this annual report will not materially
differ from actual results.


Item 1.	Description of Business

General

Since its inception in March 1983, the Company,
through its subsidiaries, has imported,
marketed and distributed in the United States
and Canada consumer electronic products,
including televisions, video cassette
recorders, audio equipment, digital alarm
clocks, quartz alarm clocks, quartz wall
clocks, clock radios and combination products
such as clock radio telephones.  The audio
equipment includes a full line of audio
products, including personal cassette players,
portable stereos and music centers with and
without compact disc players.  During the year
ended December 31, 2001, substantially all of
the Company's sales activity related to
customers located in Canada.


The Company's products are marketed principally
under its own label to mass merchandisers, drug
store chains, specialty chain stores and other
high-volume retailers.  The Company's products
are generally manufactured by subcontractors in
China.


The Company's principal executive offices are
located at 106 Ferrier Street, Markham,
Ontario, Canada and its telephone number at
such location is (905) 940-0560.

Financial and Management's Plans

During 2001, a change in control of the Company
occurred.  In April 2000, the Company and
certain controlling shareholders of the Company
at that time entered into a Stock Purchase
Agreement pursuant to which the Company agreed
to sell shares of common stock representing
84.89% of the outstanding common stock to
Master Light Enterprises Ltd. ("Master Light"),
a subsidiary of Starlight International Limited
("Starlight"), a publicly held company traded
on the Hong Kong Stock Exchange, for $1
million.  Pursuant to an amendment to the Stock
Purchase Agreement, in January, 2001, Master
Light acquired 1,347,420 shares of the
Company's Common Stock, representing 49.11% of
the Company's Common Stock outstanding at that
time, and representatives of Starlight were
appointed to the Board of Directors of the
Company replacing the incumbent directors.


In August 2001, the transactions contemplated
by the Stock Purchase Agreement, as amended,
were consummated and, after rescinding the
purchase of 1,347,420 shares, Master Light
acquired from the Company 26,585,008 shares of
the Company's Common Stock, representing 91.3%
of the Company's currently issued and
outstanding Common Stock.    In September 2001,
additional capital contributions from Starlight
allowed the Company to discharge all the
Company's obligations to its lending
institutions and provided further capital to
allow the Company to meet its ongoing
operational needs.


Starlight owns and operates a number of
subsidiaries throughout the world engaged in
the manufacture, sale and distribution of
consumer electronic products.  Management
anticipates Starlight will provide enhanced
resources for the Company to operate more
competitively.  Management believes that growth
is driven by new products and new product
design.  With the capital that is now available
through Starlight, management expects the
Company's products will have higher quality and
more updated designs.  This should allow the
Company to improve sales in the near future,
barring no significant deterioration in the
economic conditions and more particularly, in
consumer spending.


Products

Clocks - The Company manufactures and markets a
wide range of clocks, including electronic
digital alarm clocks, quartz alarm clocks and
quartz wall clocks.  The Company introduced its
first electronic digital clock in 1977 and
currently offers approximately 20 models which
retail at various prices ranging from
approximately $5 to $20.  The Company's
electronic digital clocks contain
microprocessors, printed circuit boards, light
emitting diodes and ceramic buzzers.  These
products are manufactured by subcontractors in
Hong Kong and the People's Republic of China,
which manufacturers sometimes use components
and materials supplied, and assembling methods
developed, by the Company.  Subcontractors in
Hong Kong and the People's Republic of China
manufacture the Company's wall clocks and
battery operated quartz alarm clocks.


Radios - The Company introduced its first
electronic digital clock radio in 1982 and
currently offers 8 models, with retail prices
ranging from approximately $9 to $20.  The
Company's electronic digital clock radios
contain audio components as well as components
similar to those in its electronic digital

clocks.  Most of the units were manufactured by
subcontractors in Hong Kong and the People's
Republic of China which sometimes use
components and materials supplied by the
Company.


Compact Disc Players - The Company currently
offered approximately 25 models of compact disc
player and recorder products with retail prices
ranging from $20 to $120.  All of the products
are manufactured by subcontractors in the
People's Republic of China under the Company's
specifications.  Components and material are
supplied by the subcontractors.  Starlight, the
Company's parent company also supplies a
selection of compact disc products.


Licensed Products -  The Company is a party to
a sub-distribution agreement to market in
Canada audio products utilizing the brand- name
"Memorex".  It plans to expand the licensing to
include some alarm clock products to be sold in
the U.S. and Canada.


Marketing

The Company's marketing strategy is targeted at
high volume retailers with broad distribution
networks such as mass merchandisers, drug and
other specialty chain stores, and other
retailers.  The Company did not make any sales
in the US during 2001 but has made steady
progress in establishing a wholesale
distribution channel in Canada.  The Company is
now selling its licensed brand-name "Memorex"
products to Wal-Mart Canada on an exclusive
basis.


The Company continues to look for opportunity
to add licensed brand names to its products
line  and is in negotiation with a third party
for an exclusive distribution right.


The Company's current strategy for re-entering
the US market is to locate niche markets.  The
following customers illustrate the Company's
primary marketing channels and major customers
in 2001.


Wal-Mart Canada Inc.- Mass Merchandiser

Canadian Tire Corporation -- Specialty Chain

The Company believes that its sales to high
volume retailers depends upon its ability to
deliver a large volume of attractive and
reliable items at prices generally at or below
those of its competitors.


Substantially all of the Company's Canadian
sales are generated by either the Company's
full-time sales staff or sales representatives.
Almost all of the Company's sales in 2001 were
to customers within Canada.  See Note 10 "Notes
to Consolidated Financial Statements" for
financial information about foreign and
domestic operations.


Sales to the Company's largest customer, Wal-
Mart Canada Inc., accounted for approximately
88% of sales for 2001, 88% of sales in 2000.
The loss of Wal-Mart of Canada Inc. as a
customer would have a significantly negative
impact on the Company.


The Company's products are generally sold with
a one year limited warranty on labor and parts.



Manufacturing and Supply

Most of the Company's products are manufactured
by subcontractors in  the People's Republic of
China.  Substantially all of the subcontractors
assemble products for the Company in accordance
with the Company's specifications.  The Company
performs quality control inspections on the
premises of its subcontractors, and also
inspects its products upon their arrival in its
warehouse in Canada.


All of the components and raw materials used by
the Company are available from several sources
of supply and the Company does not anticipate
that the loss of any single supplier would have
a material adverse effect on its business,
operations or financial condition.  Since
becoming part of the Starlight group, the
Company has been able to obtain supply from
Starlight mainly in the compact disc
categories.  The Company believes this has
improved its position to compete with other
distributors.


Product Development

During 2001, the Company did not introduce any
new electronic digital alarm clocks (LED and
LCD), quartz alarm clocks, quartz wall clocks
and clock radios.  New audio and other products
were developed in conjunction with the sub-
contractors and expenses were borne by the sub-
contractors. During the year ended December 31,
2001, the Company did not spend any significant
amount in product development and yet was able
to introduce several new audio products


Competition

The consumer products industry in which the
Company operates is characterized by intense
price competition, ease of entry and changing
patterns of consumer demand.  Sales volume and
profitability of particular consumer products
can change significantly within a relatively
short period.  Accordingly, the Company is
highly dependent on the ability of its
management to anticipate and respond quickly to
changes in trends for its products.

The Company believes that important factors
necessary to compete include name recognition,
price, quality reliability, attractive
packaging, speed of delivery to customers and
new or additional product features.  The
Company believes that its future success will
depend upon its ability to develop and
manufacture reliable products, which
incorporate developments in technology and
satisfy consumer tastes with respect to style
and design.  Further, the Company's ability to
market such products at competitive prices is
necessary in order to compensate for the lack
of strong consumer name recognition.  In 2001,
the Company has been able to compete better in
the market place.  Sales improved by 14%
despite a sudden slowdown in economy after
September 2001.  Average gross profit margin
also improved significantly by more aggressive
sourcing of supplies.

The Company believes that, through its parent
support, it is a significant manufacturer of
compact disc players products and competes with
several companies, including GPX and Emerson.



Foreign Operations

The Company's sales, warehousing and
administration are headquartered in Toronto,
Canada.  Sourcing, supply and quality
inspection operations are based in Hong Kong.
See Note 10 of "Notes to Consolidated Financial
Statements."  Foreign currency exposure is
limited to Canadian and Hong Kong exchange rate
fluctuation.
The Company's cost structure is affected by
import duties, loss of favorable tariff rates
for products produced in the countries in which
the Company subcontracts the manufacture of
goods, imposition of import quotas,
interruptions in sea or air transportation and
political or economic changes in countries from
which components or products are exported or
into which they are imported.


The Company will continue to subcontract its
manufacturing needs to subcontractors in Hong
Kong and the People's Republic of China.  Any
material change in the trade policies between
the United States and China might have an
adverse effect on the Company's operations.


Product Liability

The Company maintains product liability
coverage for the Company's operations in the
aggregate amount of $3,000,000.  The Company
has not been the subject of any product
liability litigation.

Government Regulation

The Company's operation is not regulated by the
Federal Government nor any State authorities.
Import tariffs are payable on some products in
accordance with the prevailing tariff rates.


Employees

On December 31, 2001, the Company had 22 full-
time employees, including 1 in Hong Kong and 21
in Canada.  In Hong Kong, one employee is
engaged in sales and sourcing support duties.
In Canada, 8 employees were engaged in
warehouse distribution and service operations
and 13 were sales, administrative and executive
personnel.  The Company believes that its
relations with its employees are satisfactory.


Where You Can Find More Information

The Company files annual, quarterly and special
reports, proxy statements and other information
with the SEC.  The Company's SEC filings are
available to the public over the Internet at
the SEC's web site at http://www.sec.gov.  The
Company's documents which are filed may be read
or copied at the SEC's public reference room in
Washington, D.C., at 450 Fifth Street, N.W.,
Washington, D.C. 20549.  Please call the SEC at
1-800-SEC-0330 for further information on the
public reference room.


Item 2.	Description of Property.

The Company's executive offices and principal
domestic manufacturing warehouse facilities are
located in a 26,865 square foot building at 106
Ferrier Street, Markham, Ontario, Canada. Both
the land and building are leased by the Company
under the terms of a lease expiring in July 31,
2005.  Monthly rental is $6,600.  The Company
also made a contribution of $3,000 a month to
share facilities for its Hong Kong based
operation.  The Company believes that its
current facilities are satisfactory for its
present needs and that insurance coverage is
adequate for the premises.



Rental commitment is $79,200 per annum under the existing lease.

Item 3.	Legal Proceedings.

The Company is from time to time involved in
routine litigation incidental to its business
most of which is adequately covered by
insurance and none of which, in the opinion of
management, is expected to have a material
adverse effect on the Company.


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

During the fourth quarter of fiscal 2001, the
Company did not submit any matter to a vote of
security holders.


PART II

Item 5.	Market for Common Equity and Related Stockholder Matters

Since March 6, 1996, the Company's Common Stock
has been listed for trading on the OTC Bulletin
Board under the symbol "CSMO."  There were 166
record holders of the Common Stock on March 28,
2002.  However those shares being held at
various clearing houses, including Cede &
Company have not been broken down.
Accordingly, the Company believes there are
many more beneficial owners of the Company's
Common Stock whose shares are held in "street
name", not in the name of the individual
shareholder


The following table sets forth the high and low
prices for the Common Stock as reported for the
periods indicated.  These prices reflect
interdealer prices, without retail mark-up,
markdown or commission and may not necessarily
represent actual transactions.



	Fiscal Period	High	Low

2000	First Quarter		0.56   	0.31
Second Quarter		No quote 	No quote
Third Quarter		No quote  	No quote
Fourth Quarter		0.001 	0.001
2001	First Quarter	....	0.5625	0.001
Second Quarter ...............................................
..	No Quote	No Quote
Third Quarter		No Quote	No Quote
Fourth Quarter		No quote	No quote

On March 22, 2002, the last reported sales
price for the Common Stock on the OTC Bulletin
Board was $0.003 per share.

It is the present policy of the Company's Board
of Directors to retain earnings.  The Company
has not declared any dividends in the past.
Any payment of cash dividends in the future
will be dependent upon the financial condition,
capital requirements and earnings of the
Company and other factors, which the Board of
Directors may deem relevant.

Item 6.  Management's Discussion and Analysis

Results of Operations

The following table sets forth, for the periods
indicated, the relative percentages that
certain items in the Company's Consolidated
Statements of Operations bear to sales and the
percentage of change  in those items from
period to period:

As a Percent of Sales
Percentage of Increase

Year Ended December 31,
(Decrease) for  period December 31
  2001	2000                  2000  to 2001
____________________     ____________________


Sales	 100.0%	100.0%	14.3%

Cost of Sales
	   89.08 	  95.6     6.6%


Gross Margin..
	  10.92	4.4  181.7%

Selling, general and
Administrative expenses...........17.6
19.2         	      13.3%

Loss from operations       		  (6.7)
(14.8)            		  (42.7)%

Other income (expense)                      6.1
	8.2
	 (62.7)%

Net Income (Loss	 )
(2.8)% 	3.4%
(195.1)%

Comparison of the year ended December 31, 2001
to the year ended December 31, 2000



Sales increased by 14.35% or $1,308,000 for the
year ended December 31, 2001.  Higher sales
were due to stronger consumer demand of the
compact disc players and the introduction of on
a trial basis, several higher end products such
as a combined television and DVD player unit
and other newer design compact disc players in
the last quarter of 2001.

Cost of sales rose by 6.6% as a result of
aggressive sourcing of products.  Gross margin
was lifted from 4.4% of sales in 2000 to 10.9%
in 2001.

Selling, general and administrative expenses
increased by 13.4%, largely due to higher sales
activities.

Revenue earned as commission rose by 88% or
$324,000 in 2001.  The Company earned
commissions as distributor for an unrelated
party in Canada through its existing sales
channels.

Net result in 2001 was a loss of $292,000 in
2001compared with a profit of $307,000 in 2000.
The profit in 2000 included two non-recurring
events which contributed $1,557,000 windfall
gain in that year.  Without these events,
results in 2001 would have been better than
2000 by 77%.

Liquidity and Capital Resources

The Company's working capital deficit improved
by $1,843,000 from a deficit of $2,563,000 in
2000 to $720,000 in 2001.  The ratio of current
assets to current liabilities at December 31,
2001 was .81 to 1, as compared to .52 to 1 at
December 31, 2000.

During 2001, the Company repaid all its short
term loans and notes payable as follows:

Credit facilities from financial institution							$998,000
Notes payable 													$749,000
Bridge loan														$440,000

The repayments were financed by a loan provided
by Starlight.  The balance of this loan bears
interest at  prime plus 1% per annum.  Balance
at December 31, 2001 was $1,322,000 including
interest accrued.

In addition, Starlight provided working capital
to the Company through trades.  Balance of
trade payable to Starlight at year end was
$1,242,000.

The Company received $1,000,000 in shares
subscription from Starlight at the closing of
the Stock Purchase in August 2001.  Proceeds of
this transaction were used to discharge the
short term liabilities with financial
institutions.

Loan due to the previous principal stockholder
was settled fully by common shares issued in
pursuant of the Stock Purchase Agreement.

The Company is subject to risk from exchange
rate fluctuations.  While the Company's product
purchases are transacted in United States
dollars, most transactions among the suppliers
and subcontractors are effected in HK dollars.
Accordingly, fluctuations in Hong Kong monetary
rates may have an impact on the Company's cost
of goods.  Furthermore, appreciation of Chinese
currency values relative to the Hong Kong
dollar could increase the cost to the Company
of the products manufactured in the People's
Republic of China, and thereby have a negative
impact on the Company.  As well since the
majority of the Company's sales are in Canadian
dollars, the Company is at risk with regards to
the conversion of Canadian dollars to US
dollars to pay its suppliers.  Therefore,
fluctuations in the conversion rate may have an
impact on the Company. Based on the Company's
evaluation of anticipated changes in exchange
rates, the Company may from time to time
purchase forward exchange contracts to hedge
against these risks.  However, the Hong Kong
dollar remains the functional currency of the
Company's Hong Kong subsidiaries, and the
Company does not hedge against risks of foreign
currency transaction or translation loss.


Item 7.	Financial Statements.

See the Company's Consolidated Financial
Statements following page 17 of this Annual
Report on Form 10-KSB.

Item 8.	Changes in and Disagreements With
Accountants on Accounting and Financial
Disclosure

The Company has reported no disagreements.

PART III

Item 9.	Directors, Executive Officers,
Promoters and Control Persons; Compliance with
Section 16(a) of the Exchange Act.

Directors and Executive Officers

Pursuant to the Bylaws of the Company, the
number of directors constituting the full Board
Of Directors has been fixed by the Board at
three (3).  At the Annual Meeting of
Shareholders,  three (3) individuals will be
elected to serve as directors until the next
annual meeting and until their successors are
duly elected, appointed and qualified.


Set forth below is the name, age, principal
occupation during the past five years and other
information concerning each director and
executive officer.


Name	Age	Position

Philip Lau	54	Chairman of the Board of
Directors, and President

Peter Horak	61	Chief Executive Officer,
Canada

Yu Wing Kin	50	Vice President,
Administration, Hong Kong

Carol Atkinson	53	Director

Jacky Lau	43	Director


Mr. Philip Lau, Chairman of the Board of
Directors, was appointed in January 2001 after
Starlight International Limited acquired 49% of
the voting shares of the Company.  Since 1987,
Mr. Lau has been the Chairman of Starlight
International, an electronics company the
shares of which are listed on the Hong Kong
Stock Exchange, and has extensive experience in
the consumer electronics business.

Mr. Peter Horak, President of Cosmo Canada, was
appointed as the Chief Executive Officer in
January 2001.  Mr. Horak was the co-founder of
Cosmo's Canadian subsidiary and has been its
chief executive officer since 1988.  Mr. Horak
is the Company's chief sales, marketing, and
sourcing executive.

Mr. Kin has served as Vice President of
Administration of  Cosmo Hong Kong since
joining the Company in August 1978.

Ms. Atkinson has served as a director of the
Company since January 2001 after Starlight
International Limited acquired its shares.
Since January 2001, Ms. Atkinson has served as
Chief Financial Officer of  Cosmo
Communications Corporation. Prior to this, she
was self-employed as a financial consultant.

Mr. Jacky Lau has served as a director of the
Company since January 2001 after Starlight
International Limited acquired its shares.  He
joined Starlight International in 1987 as the
Director of Material Sourcing.

Mr. Philip Lau, Mr. Jacky Lau and Ms. Atkinson
are siblings.

Directors are elected annually by the
shareholders and hold office until the next
annual meeting and until their respective
successors are elected and qualified. There are
no other family relationships among any of the
Company's directors and executive officers.

Section 16(a) Beneficial Ownership and
Reporting Compliance

The directors and executive officers of the
Company, and the owners of more than ten (10%)
percent of the Company's outstanding Common
Stock, are required to file reports with the
Securities and Exchange Commission, reporting
changes in the number of shares of the
Company's Common Stock beneficially owned by
them and provide the Company with copies of all
such reports.  Based solely on its review of
the copies of such reports furnished to the
Company and written representations from the
executive officers and directors, the Company
believes that all reports were timely made for
the year ended December 31, 2001, with the
following exceptions: (i) Philip Lau, reported
late on Form 3, filed February 16, 2000, his
beneficial ownership of 1,347,420 shares of
Common Stock purchased on January 23, 2000;
(ii) Carol Atkinson, Director, reported late on
a Form 3, filed on November 14, 2001, her
appointment as a director of the Company on
January 23, 2001; and (iii) Jacky Lau,
Director, reported late on reported late on a
Form 3, filed on November 14,, 2001, his
appointment as a director of the Company on January 23, 2001

Item 10.		Executive Compensation

Summary Compensation Table.

The following table sets forth, for the 2001and
2000 fiscal years, respectively, compensation
paid or accrued by the Company to or on behalf
of the Company's Chief Executive Officer and
each other executive officer whose total annual
salary and bonus for the 2001 fiscal year
totaled $100,000 or more (collectively, the
"Named Executive Officers").

Annual Compensation(1)

2001	2000	   2001	2000		    All Other
Name and Principal Position	Salary ($)	Bonus
($)	Compensation
Starlight International
5/F, Shing Dao Industrial Building
232 Aberdeen Main Road
Hong Kong
Philip Lau					  none	none	   none	none			   (1)

Peter Horak
CEO, Canada					129,000	105,200	   none	none			   (1)

Carol Atkinson				  none	none	   none	none			   (1)

Jacky Lau					  none	none	   none	none			   (1)


 (1)  The column for "Other Annual
Compensation" has been omitted because there is
no compensation 	required to be reported in
such column.  The aggregate amount of
perquisites and other personal benefits
provided to each Named Executive Officer is
less than 10% of the total of annual salary and
bonus of such officer.

Option Grants Table.  No options were granted
or exercised during fiscal 2001.
Aggregated Fiscal Year-End Option Value Table.
No Named Executive Officers held any options as
of the end of the 2001 fiscal year.
Long-Term Incentive and Pension Plans.  The
Company does not have any long-term incentive
or pension plans.
Compensation of Directors.  Directors who are
not officers of the Company generally receive
meeting attendance fees of $300. However, each
such director waived his right to receive such
fees during 2001.  Annual retainers are not
currently provided to directors; however, such
retainers may be re-instituted in the future.
Directors are eligible to receive grants of
options under the Company's stock option plan.
No stock options were granted to any directors
of the Company during 2001.

Item 11.	Security Ownership of Certain
Beneficial Owners and Management.

The information contained in the table was
furnished by the persons listed therein.  The
calculations of the percent of shares
beneficially owned are based on 29,104,066
shares of common stock outstanding on September
14, 2001.  None of the persons named below own
any options or warrants to purchase shares of
the Corporation's common stock.


Name and Address
Beneficial Ownership
of Common Stock
Current
Percent of Class
Starlight International
5/F, Shing Dao Industrial Building 232 Aberdeen Main Road, 5th Floor
Hong Kong
Philip Lau
Carol Atkinson
Jacky Lau
Peter Horak
26,585,008(1)


26,585,008(1)
none
none
257,500
91.3%


91.3%


0.9%
All Directors and Executive Officers as a
Group (4 persons)
26,842,508(1)
92.2%

(1)	Includes 26,585,008 shares owned by
Master Light Enterprises, Ltd., of which Mr.
Lau is the controlling stockholder.


Item 12. 	Certain Relationships and Related
Transactions.
As of December 31, 2001, the Company owed
approximately $2,564,000 to Starlight group of
companies,  principal shareholders of the
Company. $1,242,000 was owed in the form of
trades payable.  The balance was in the form of
a loan.
In August 2001, in accordance with the Letter
Agreements described below, the previous
principal shareholders received 1,555,000  new
shares of the Company's Common Stock as
repayment of the loan owed to them.  These
principal shareholders also agreed to surrender
an aggregate of 2,294,567 shares as treasury
stock.
On August 20, 2001, Master Light, a company
controlled by Philip Lau, the Chairman of the
Board and President of the Company, acquired
from the Company 26,585,008 shares of the
Company's Common Stock, representing 91.3%  of
the Company's currently issued and outstanding
Common Stock for $1,000,000.  A portion of the
purchase price paid for the shares was taken as
a credit against the principal and interest due
on the Starlight bridge loan to the Company,
which was then deemed paid in full.

The purchase was consummated pursuant to the
terms of the Stock Purchase Agreement dated
April 28, 2000 (the "Stock Purchase Agreement")
by and among the Company, Amancio Victor
Suarez, Carlos Ortega ("Ortega), Amancio J.
Suarez ("AJ Suarez" and collectively with AV
Suarez and Ortega, the "Stockholders") and
Master Light, as assignee of Starlight, and the
related letter agreements supplementing and
modifying the terms of the Stock Purchase
Agreement among the Stockholders, Peter Horak
("P. Horak") and/or Jeffrey Horak ("J. Horak")
and Master Light dated April 19, 2000, July 13,
2000, July 27, 2000, November 20, 2000 and
August 20, 2001(the "Letter Agreements").
Pursuant to the terms of the Letter Agreements,
on January 23, 2001, Master Light acquired an
aggregate of 1,347,420 shares (the "Phase I
Shares") of the Common Stock of the Company
from the Stockholders (the "Phase I Purchase")
for an aggregate of $50,843 (the "Purchase
Price").  The Phase I Shares were acquired as
an interim measure since the Company could not
consummate the sale contemplated by the Stock
Purchase Agreement until the stockholders of
the Company approved an increase in the number
of authorized shares of Common Stock of the
Company from 4,000,000 to 50,000,000, which was
approved on June 9, 2001.  On the date of
Master Light's purchase of the shares from the
Company, the purchase of the Phase I Shares was
rescinded.
Under the terms of the Letter Agreements, the
Company issued to Peter Horak and Jeff Horak,
Executive Officers of the Company's Canadian
operating subsidiary, an aggregate of 535,000
shares of newly issued common stock in
consideration for P Horak's and J Horak's
agreement to release the Company from its
obligation to repay $79,425 owed to them and
from any other claims which P Horak and J Horak
might have against the Company or its
subsidiaries or their respective directors,
officers or stockholders.  They agreed to
surrender an aggregate of 20,000 shares as
treasury stock.

Item 13.	Exhibits, Lists and Reports on Form
8-K.

(a)	1.	Financial Statements:

Reference is made to the index to the Company's
Consolidated Financial Statements following
page 17 of this Annual Report on Form 10-KSB.


	2.	Financial Statement Schedules:

These schedules are otherwise contained within
the Company's Consolidated Financial Statements
following page 17 of this Annual Report on Form
10-KSB.
	3.	Exhibits:

 		Exhibit No.	 Description
		  3.1.1		Registrant's Articles of Incorporation, as amended
		  3.2	 		Registrant's Bylaws (1)
10.1			Amended and Restated 1990 Stock Option Plan (Compensatory   Plan)(2)
10.2			Stock Purchase Agreement
dated April 28, 2000 by and among Company,
Amancio Victor Suarez, Carlos Ortega, Amancio
J. Suarez and Master Light Enterprises Ltd., as
assignee of Starlight Marketing Development
Ltd. and the related letter agreements
supplementing and modifying the terms of the
Stock Purchase Agreement April 19, 2000, July
13, 2000, July 27, 2000, November 20, 2000 and
August 20, 2001.


 22.1
List of Registrant's Subsidiaries (3)

____________________


(1)  Incorporated by reference to the exhibit
with the same number filed with the
Registrant's Registration Statement No. 2-
83088.

(2)  Incorporated by reference to  exhibit 10.2
filed with the Registrant's Annual Report on
Form 10-K for fiscal 1990.

(3)  Filed in part herewith, and incorporated
by reference to (i) exhibits 10.8, 10.9, 10.10,
10.11, 10.12 and 10.13 filed with the
Registrant's Annual Report on Form 10-K for
fiscal 1989, and (ii) exhibits 10.4 filed with
the Registrant's Annual Reports on Form 10-K
for fiscal 1990, 1991 and 1992, respectively.

(b) 	Reports on Form 8-K

No reports on Form 8-K were filed during the
last quarter of the period covered by this
report.


Signatures

In accordance with Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant
caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.

COSMO COMMUNICATIONS CORPORATION
DATED: March 28, 2002                                 /s/ Peter Horak
PETER HORAK
Chief Executive Officer, Canadian Operation

In accordance with the Exchange Act of 1934,
this report has been signed below by the
following persons on behalf of the registrant
and in the capacities and on the dates
indicated.

DATED: March 28, 2002
										/s/ Philip Lau
PHILIP LAU,
Chairman of the Board
President

										/s/ Carol Atkinson
CAROL ATKINSON
Chief Financial Officer
























COSMO COMMUNICATIONS CORPORATION AND SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
    Page
INDEPENDENT AUDITORS' REPORT   									F-1

CONSOLIDATED BALANCE SHEETS

AS OF DECEMBER 31, 2001 AND 2000
						F-2

CONSOLIDATED STATEMENTS OF OPERATIONS
FOR EACH OF THE TWO YEARS IN THE PERIOD
ENDED DECEMBER 31, 2001
							F-3


CONSOLIDATED STATEMENTS OF STOCKHOLDERS'
DEFICIENCY FOR EACH OF THE TWO YEARS IN THE
PERIOD ENDED DECEMBER 31, 2001

							F-4

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR
EACH OF THE TWO YEARS IN THE PERIOD ENDED
DECEMBER 31, 2001

							F-5
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

							F-6
Schwartz Levitsky Feldman LLP
Chartered Accountants
Toronto, Montreal, Ottawa


REPORT OF INDEPENDENT AUDITORS

To the Board of Directors and Stockholders of
  Cosmo Communications Corporation and Subsidiaries:

We have audited the accompanying consolidated
balance sheets of Cosmo Communications
Corporation and subsidiaries (incorporated in
Florida) as of December 31, 2001, and the
related consolidated statements of operations,
stockholders' deficiency, and cash flows for
the year ended December 31, 2001.  These
consolidated financial statements are the
responsibility of the Company's management.
Our responsibility is to express an opinion on
these consolidated financial statements based
on our audits.  The consolidated financial
statements of Cosmo Communications Corporation
and Subsidiaries as of December 31, 2000 were
audited by other auditors whose report dated
September 14, 2001, expressed an unqualified
opinion on those statements, accompanied by an
explanatory paragraph on the ability of the
Company to continue as a going concern.

We conducted our audits in accordance with
auditing standards generally accepted in the
United States of America.  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, such consolidated financial
statements referred to above present fairly, in
all material respects, the consolidate
financial position of Cosmo Communication and
Subsidiaries as of December 31, 2001 and the
results of its operations and its cash flows
for each of the year ended December 31, 2001,
in accordance with accounting principles
generally accepted in the United States of
America.
The accompanying consolidated financial
statements have been prepared assuming the
Company will continue as a going concern. As
discussed in Note 1 to the consolidated
financial statements, the Company has incurred
significant losses and has significant working
capital and stockholder deficiencies.  These
conditions raise substantial doubt about its
ability to continue as a going concern.
Management's plans regarding to those matters
are also described in Note 1. The consolidated
financial statements do not include any
adjustments that might result from the outcome
of this uncertainty.


Chartered Accountants
Toronto, Canada

 March 28, 2002






COSMO COMMUNICATIONS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2001 AND 2000
ASSETS     2001               2000
 	($ in 000's)	   ($ in 000's)
CURRENT ASSETS:
Cash and cash equivalents
   	$  449			$   646
Accounts receivable, net of allowance for
doubtful accounts of  $32,000 and $52,000, in
2001 and 2000, respectively	(note 2)
	990                        784
Inventories
      1,657		  1,393
 Other assets
       7			         7
__________       _________
Total current assets
   3,103		  2,830
PROPERTY AND EQUIPMENT, net (note 3)
 	     14				9

 ___________        __________
Total	 $ 3,117	    	          $2,839


LIABILITIES AND STOCKHOLDERS' DEFICIENCY

CURRENT LIABILITIES:

Accounts payable and accrued expenses
      $ 1,307	   	 $     2,025
Credit facility and other financing
arrangements(note 4) -	    	        2,187
Due to principal stockholder
                 	    -		        1,181
Accounts payable to related party(note 4 &5)			1,194			  -
Loan from related party (note 4 &5)
		        1,322  	   	  -
		  __________         __________
Total current liabilities 			          3,823		5,393

STOCKHOLDERS' DEFICIENCY:

 Common Stock (note 6 and note 7)			     						1,571	                   137
 Treasury stock	(note 6)										( 116)		-
Additional paid-in capital 			     	        26,273	     25,410
 Accumulated deficit
             (26,846)	   (26,554)
 Accumulated other comprehensive loss
  	        (1,588)        	     (1,547)
                                       __________        _________
Total stockholders' deficiency
    	           (706)    	     (2,554)


              __________        _________
Total	    $    3.117    	     $ 2,839


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




     F-2
COSMO	 COMMUNICATIONS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR EACH OF THE TWO YEARS IN THE PERIOD ENDED DECEMBER 31, 2001
2001              		2000
($ in 000's)		  ($ in 000's)
     (except per share data)

SALES, net						                  		      $ 10,425		       $ 9,117

COST OF SALES  9,287	   	          8,713


__________

GROSS MARGIN	1,138			  404
		   __________       __________

OPERATING EXPENSE:
Selling expenses 	803	   	  960
General and administrative expenses
    1,031				  794
__________                  _________
     1,834				1,754


__________                  _________
LOSS  FROM OPERATIONS
 (  696) 			       ( 1,350)
________                  _________

OTHER INCOME (EXPENSE):
Interest expense	 (232)	 (290)
Interest income     35		   22
Commissions		692		  368
Gain on sale of fixed assets
  -	 			  726
Gain on sale of subsidiaries
  -				  831
 Exchange losses
( 91)  				    -

Total other income (expense), net
404				1,657
___________                   __________

NET INCOME ( LOSS)
$     (292)            $      307

BASIC AND DILUTED INCOME (LOSS) PER
COMMON STOCK
$     (.025)                  $   .11


WEIGHTED AVERAGE NUMBER OF COMMON
STOCKS USED IN COMPUTING INCOME (LOSS)
PER SHARE	11,524,000      2,692,000

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



F-3

COSMO COMMUNICATIONS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIENCY
FOR EACH OF THE TWO YEARS IN THE PERIOD ENDED DECEMBER 31, 2001
								($ in 000s except issued share data)

Common Accumulated Stock
Additional
Other   __
Shares __
Paid-in
Accumulated Comprehensive
Number
Amount
Capital
Deficit
Income
Total

BALANCE,
DECEMBER 31, 1999       2,642,000
	       133            25,410
	  (26,861)            (1,514)
	 ( 2,832)


Shares issued			102,000
	 4				 4

Net income  307          307

Other comprehensive income :
Foreign Currency Translation   									             (33)                (33)
________     ________    __________      __________   ________      ________
BALANCE, DECEMBER 31, 2000
 2,744,000            137           25,410
(26,554)            (1,547) 	    (2,554)

Shares issued
 28,675,000    1,434	863	   2,297

Treasury stock
(2,335,000)	    (116)	(116)

Net loss 	(292)        (292)

Other comprehensive loss :
Foreign Currency Translation
    (41)  	         (41)
_________     ________   __________     __________   _________   ________
BALANCE,
DECEMBER 31, 2001
  29,104,000        $1,455        $ 26,273
$ (26,846)        $ (1,588)          $   (706)





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






F-4
COSMO COMMUNICATIONS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR EACH OF THE TWO YEARS IN THE PERIOD ENDED DECEMBER 31, 2001
2001 2000
    ($ in 000's)			($ in 000's)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $    (292)	 $     307
Adjustments to reconcile net income (loss) to
net cash provided by (used in) operating
activities:
Depreciation and amortization
	4					 205

Gain from sale of fixed assets
	      -					(726)
Gain on sale of subsidiaries
	-                            (831)
Decrease (increase) in accounts receivable, net
        (206)					 575
(Increase) decrease  in inventories, other
current assets and other assets
	(264)			         (300)
Increase in accounts payable and accrued
expenses and other current liabilities
     766					 566
Increase in accounts payable with related
party
	1,242					   -
Foreign Currency Translation adjustment
	 (41)           			   -
  _________                        __________
Net cash provided by (used in) operating
activities
     	(323)					(204)


CASH FLOWS FROM INVESTING ACTIVITIES:
Net proceeds from sale of fixed assets
     	 -					1,801

Purchases of property and equipment
	 (9)     				    -
      ___________			  _________
Net cash provided by (used in) investing activities
      (9)					1,801
____________                       _________

CASH FLOWS FROM FINANCING ACTIVITIES :
Repayment of notes and loans			(1,189)	        (1,253)
Proceeds from related party loan
      1,322			  440
Repayment of credit facility
	(998)		  	    (3)
Net increase(decrease)in due to stockholders (note 4)
	                            (170)
Proceeds from shares issued
    1,000	        	      4
 _________              	__________
 Net cash (used in) provided by financing activities
  135				   	  (982)
__________                 	__________
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS
     (197)		  	   615
CASH AND CASH EQUIVALENTS AT THE
BEGINNING OF THE YEAR
	646	     	    31
	_______     	 __________

CASH AND CASH EQUIVALENTS AT THE
END OF THE YEAR
 $       449      $ 646

SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION - Cash paid during the year for
interest
 $      169    		   $           250

SUPPLEMENTAL DISCLOSURES OF NON-CASH
FINANCING and INVESTING ACTIVITIES:
Credit facility settled by sale of subsidiaries
       -                              $  859
Disposal cost of fully depreciated assets
	 -		                $175
Loan due previous principal shareholder
$       1,181  		 $       -

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

F-5
COSMO COMMUNICATIONS CORPORATION AND
SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR EACH OF THE TWO YEARS ENDED DECEMBER 31,
2001
1.	GENERAL AND SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES

General - Cosmo Communications Corporation and
subsidiaries (the "Company") markets and
distributes consumer electronic products.  The
Company has operations in Hong Kong and Canada.

Financial Difficulties and Management's Plans -
The Company has incurred significant losses,
and has a significant working capital and
stockholder deficiency.  The Company continued
to experience intense price competition in the
consumer electronic retail market in 2001.
During the year, management consolidated the US
operation and merged it with the Canadian
operation to focus its business in Canada.
Management believes that the support of the new
shareholder will provide the Company with the
resources necessary to meet its obligations
over the next year.  The Company's ability to
ultimately return to profitability is dependent
upon a number of factors beyond its control,
including the overall retail climate and
competition and resources injected by the new
shareholder.

Use of Estimates - The preparation of
consolidated financial statements in conformity
with generally accepted accounting principles
in the United States of America requires
management to make estimates and assumptions
that affect the reported amounts of assets and
liabilities at the date of the consolidated
financial statements and the reported amounts
of revenues and expenses during the reporting
period.  Actual results could differ from those
estimates.
Fair Value of Financial Instruments - The
Company's financial instruments include cash
and cash equivalents, receivables, payables,
debt and credit facilities. The fair values of
such financial instruments have been determined
based on current market interest rates as of
December 31,  2001. The fair values of these
instruments were not materially different than
their carrying (or contract) values.
Principles of Consolidation - The Company
includes, in consolidation, its wholly owned
subsidiaries, Cosmo Canada Communications
Corporation and Cosmo Hong Kong communications
Limited Company.  All significant intercompany
transactions and balances have been eliminated
upon consolidation.
Cash and Cash Equivalents - All highly liquid
instruments with a maturity of three months or
less when acquired are considered cash
equivalents.



F-6



Inventories - Inventories are stated at the
lower of cost (first-in, first-out) or market.
Other asset- Other asset consists of deposits
on rental leases.
Property and Equipment - Property and equipment
is stated at cost.  Amortization is provided
using the straight-line method over the
estimated useful lives of the related assets
which range from three to eight years for
property and equipment, other than the
building, which is amortized over thirty years.
Foreign Translation Adjustment - The accounts
of the foreign subsidiaries were translated
into U.S. dollars in accordance with the
provisions of  Financial Accounting Standards
Board Statement No. 52 ("SFAS 52").  Management
has determined that the Hong Kong dollar is the
functional currency of the Hong Kong
subsidiaries and the Canadian dollar is the
functional currency of the Canadian subsidiary.
Certain current assets and liabilities of these
foreign entities are denominated in U.S.
dollars.  In accordance with the provisions of
SFAS 52, transaction gains and losses on these
assets and liabilities are included in the
determination of income for the relevant
periods.  Adjustments resulting from the
translation of the financial statements from
their functional currencies to United States
dollars are accumulated as a separate component
of accumulated other comprehensive income and
have not been included in the determination of
income for the relevant periods.
Revenue Recognition - Sales are recognized upon
shipment of goods as that is the point at which
title passes to the customer, net of estimated
sales returns.  Revenue is recognized if
persuasive evidence of an agreement exists, the
sales price is fixed or determinable, and
collectibility is reasonably assured.
Concentrations of Credit Risks - The Company's
receivables are unsecured and are generally due
in 30 days.
Income Taxes - The Company follows the
guidelines contained in Financial Accounting
Standards Board Statement 109, Accounting for
Income Taxes ("SFAS 109").  SFAS 109 requires
an asset and liability approach for financial
accounting and reporting for income taxes.  In
addition, SFAS 109 requires that deferred tax
liabilities and assets be adjusted in the
period of enactment for the effect of an
enacted change in tax laws or rates.  Valuation
allowances are established when necessary to
reduce deferred tax assets to the amount
expected to be realized.

 Loss Per Share - Basic loss per share is
computed based on the average number of common
shares outstanding and diluted loss per share
is computed based on the average number of
common and potential common shares outstanding.
As of each period ended there were no dilutive
common equivalent shares. The stock options
discussed in Note 9 could potentially dilute
earnings per share in the future but were not
included in diluted loss per share since they
would be anti-dilutive for the periods
presented.

Stock-Based Compensation Plans -  Stock-based
compensation plans include all arrangements by
which employees and non-employee members of the
Board of Directors receive shares of stock or
other equity instruments of the Company or the
Company incurs liabilities to employees in
amounts based on the price of the Company's
stock.  The Company has chosen to continue to
account for stock-based plans using the
intrinsic value method prescribed by Accounting
Principles Board Opinion ("APB") No.25,
Accounting for Stock issued to Employees and
related interpretations. Accordingly,
compensation cost of stock based compensation
is measured as the excess, if any, of the fair
value of the Company's stock at the date of the
grant over the amount an employee or non-
employee member of the Board of Directors must
pay for the stock.  The Company did not enter
into any stock based compensation arrangement
in 2001 or 2000.

Comprehensive Income - Statement of Financial
Standards No. 130, Reporting Comprehensive
Income requires that all components of
comprehensive income be reported in a full set
of general purpose financial statements.
Accumulated other comprehensive loss as
presented on the consolidated statements of
stockholders' equity represents the foreign
currency translation adjustment.
Derivative Instruments and Hedging Activities -
In June 1998, the Financial Accounting
Standards Board ("FASB") issued Statement of
Financial Accounting Standard ("SFAS") No. 133,
Accounting for Derivative Instruments and
Hedging Activities.  SFAS No. 133 establishes
accounting and reporting standards requiring
that every derivative instrument(including
certain derivative instruments embedded in
other contracts) be recorded in the balance
sheet as either an asset or a liability
measured at its fair value.  SFAS No. 133
requires that changes in the derivative's fair
value be recognized currently in earnings
unless specific hedge accounting criteria are
met.  Special accounting for qualifying hedges
allows a derivative's gains and losses to
offset related results on the hedged item in
the income statement, and requires that a
company must formally document, designate and
assess the effectiveness of transactions that
receive hedge accounting treatment. In June
1999, the FASB issued SFAS No. 137, Accounting
for Derivative Instruments and Hedging
Activities - Deferral of the Effective Date of
adoption of SFAS No. 133 to fiscal years
beginning after June 15, 2000.  The Company
does not believe that the adoption of SFAS No.
133 will have a material impact on its
consolidated financial statements.
Recent accounting pronouncements - FASB has
issued SFAS No. 141 to 144. These new
accounting and reporting standards address
business combinations, goodwill and intangible
assets, asset retirement obligations and
impairment or disposal of long-lived assets.
The Company is in the process of identifying
the impact, if any, of adoption of  these
standards.
 2.	ACCOUNTS RECEIVABLE
The activity for the allowance for doubtful
accounts is as follows for the years ended
December 31:

2001     		    2000
($ in 000's)		($ in 000's)
	Beginning balance  		 	 			     $   52			    $  19
	Provision		         	        			 	           32	 	   	       138
	Write-offs, net of recoveries				        (52)			    (105)
   	Ending balance				      			      $  32			    $  52
The Company carries accounts receivable at the
amounts it deems to be collectible.
Accordingly, the Company provides allowances
for accounts receivable it deems to be
uncollectible based on management's best
estimates. Recoveries are recognized in the
period they are received. The ultimate amount
of accounts receivable that become
uncollectible could differ from those
estimated.
3.	PROPERTY AND EQUIPMENT
Property and equipment consisted of the
following as of December 31:
2001			     2000
    ($ in 000's)		($ in 000's)


	Leasehold improvements      		   		    	   	       12	                 12
	Plant and equipment				   				       43	                 34

Furniture and fixtures							       29		         29
Total 	           84		         75
Less accumulated depreciation and amortization
(    70)                     (66)
   $        14	         $        9


4.	CREDIT FACILITY AND OTHER FINANCING
ARRANGEMENTS AND OTHER CURRENT LIABILITIES
Credit facility and other financing
arrangements consist of the following:
	2001  		2000
($ in 000's)           ($ in 000's)
Credit facility
	 $        -		     $      998
Promissory note
	         -	         	    749
Note payable
	       -   		           440

	   $   - 	    	      $   2,187

Credit facility - The Company repaid all credit
facility as of December 31, 2001.
Promissory note - The Company repaid the
promissory note as of December 31, 2001.
Note payable  In August 2001, this note was
fully discharged together with accrued interest
of $76,300 by applying it as a credit against
the purchase price Starlight paid for the
shares of the Company.
Other current liabilities consist of:
Due to previous principal stockholders -  On
August 23, 2001,  this loan was converted to
equity by the Company issuing 1,555,000 new
shares to the stockholders.

Loan from related party - The Company received
a loan from Starlight in August 2001.  This
loan bears interest at prime rate plus 1% and
is payable on demand.  As of December 31, 2001,
total owed was $1,322,000 including interest
accrued

5.	RELATED PARTY TRANSACTIONS
Apart from those as disclosed in note 4, the
Company's transactions with related party which
in the opinion of the directors, were carried
out on normal commercial terms and in the
ordinary course of the Company's business.
As of December 31, 2001, the Company owed
approximately $2,564,000 to Starlight group of
companies, principal shareholders of the
Company. $1,242,000 was owed in the form of
trades payable.  The balance was in the form of
a loan.  During the year, the Company purchased
$4,860,491 of goods from Starlight and paid
$163,000 in handling charges for repair of
products.



6.	COMMON STOCK AND TREASURY STOCK
Authorized
30,000 Preferred stock, cumulative, convertible
at $0.01 par value
9,970,000 Preferred stock, at $0.01 par value
50,000,000 common stock at $0.05 par value
Issued									2001			2000
										   $			    $
										 ('000)		 ('000)
29,104,000 common stock (2000 - 2,744,000)		   1,571		     137
On June 19, 2001, shareholders of the Company
at a Special Meeting, approved the amendment of
the Company's Articles of Incorporation to
increase the number of authorized shares from 4
million to 50 million shares.
In August 2001, the transactions contemplated
by the Stock Purchase Agreement, as amended,
were consummated and, after the purchase of the
1,347,420 shares by Master Light were
rescinded,  Master Light acquired from the
Company 26,585,000 shares of the Company's
common stock, representing  91.3% of the
Company's currently issued and outstanding
Common Stock.  As part of the Stock Purchase
Agreement, the stock of two of the Company's
subsidiaries, Cosmo Telecom Corp. and Cosmo
World Wide Corp., were transferred to the
former controlling shareholders of the Company.
Under the terms of the Agreement above, the
Company issued to two executive officers of the
Company's Canadian operating subsidiary an
aggregate of 535,000 shares of newly issued
common stock in consideration  of their
agreement to release the Company from its
obligation to repay $79,425 owed to them and
from any other claims which they might have
against the Company and its subsidiaries and
thereof respective directors, officers or
stockholders.  They agreed to surrender an
aggregate of 20,000 shares as treasury stock.
In September 2001, the two loans with
outstanding balances as of December 31, 2000 at
$997,994 and $749,528 were repaid in full.
Further, the loan balance due to major
shareholders of $1,181,147 was discharged by
the Company through the issuance of 1,555,000
shares of common stock.  These principal
shareholders also agreed to surrender an
aggregate of 2,294,567 shares as treasury stock
(note 4).
The Company's outstanding bridge loan of
$400,000 with an accrued interest of $76,300
was discharged by a credit against the purchase
price Starlight paid for the shares of the
company that it purchased .
7.	STOCK OPTION PLAN
Stock Option Plan - The Board of Directors of
the Company (the "Board") adopted the 1990
Stock Option Plan (the "Plan) effective
December 15, 1990.  Effective December 23,
1994, the 1990 Stock Option Plan was amended
and restated.  The Plan reserved 270,000 shares
of common stock for issuance thereunder.  Under
the Plan, the Company may grant incentive stock
options, nonqualified stock options, and stock
appreciation rights.  The purpose of the Plan
is to further the best interests of the Company
and its subsidiaries by encouraging employees ]
and consultants of the Company and its
subsidiaries to continue association with the
Company.  The employees eligible to participate
in the Plan as recipients of stock options or
stock appreciation rights are such officers and
employees of the Company and such other key
employees of the Company and its subsidiaries,
as the Board shall from time to time determine,
subject to the limitations of the Plan.
The Plan is administered by the Board or by a
committee of the Board designated by the Board.
The Board, or such committee, determines, among
other things, which officers, employees and
directors of the Company receive options or
stock appreciation rights under the Plan, the
number of shares to be covered by the options,
and the date of grant of such options.  The
options granted under the Plan terminate at the
earlier of (i) a date set by the Board at the
time of grant, or (ii) ten years from their
respective dates of grant, except in the case
of incentive stock options granted to a
shareholder owning ten percent (10%) or more of
the Company's common stock, with respect to
whom options granted are exercisable over a
period no longer than five years.  The exercise
price for stock options granted under the Plan
is determined by the Board and is required to
be at least the par value per share of the
common stock, except in the case of incentive
stock options (which must have a price which is
not less than fair market value) granted to a
shareholder owning ten percent (10%) or more of
the Company's common stock, with respect to
whom the exercise price is required to be at
least one hundred ten percent (110%) of such
fair market value.  The exercise price must be
paid in full by an employee in cash, common
stock of the Company or any other form of
payment permitted by the Board.
As of December 31, 2001, 252,000 stock options
were outstanding of which 230,000 were
exercisable.  No stock options were granted,
exercised, forfeited or expired for the last
three years.  The exercise price of the stock
options range from $.45 - $1.55 per option.









8.	INCOME TAXES
The Company has unused  tax loss carryforwards,
the measurement of which has not been reliably
estimated but may be approximately $20 million,
which would be available to offset future
taxable income. Such carryforwards relate in
part to domestic and in part to foreign
jurisdictions and expire from the year 2002
through the year 2017.
The Company has reduced the deferred tax assets
resulting from its domestic and foreign tax
loss carryforwards by a 100% valuation
allowance as it has determined that it is more
likely than not that the deferred tax assets
will not be realized. Accordingly, the deferred
tax asset net of the valuation allowance is not
affected by the measurement uncertainty and is
zero at December, 31 2001 and 2000.


9.	CONTINGENCIES
 From time to time, the Company is engaged in
ordinary routine litigation incidental to its
operations.  The Company, after considering the
advice of legal counsel, believes that any such
litigation will not have a material adverse
effect on its consolidated financial position.
The Company is not in compliance with the
periodic reporting requirements of the
Securities Exchange Act of 1934.  Management is
unable to determine what effect, if any, this
non-compliance will have on its operations.

10.	OPERATING SEGMENT INFORMATION- ( IN THOUSANDS)

The Company operated in one business segment
and all of its sales are consumer electronic
products.  The Company's customers are
principally in Canada.  Borrowings are
principally in the United States.

 Wal-Mart Canada Inc. is the Company largest
customer, which accounted for 88% of sales in
2001 (88% in 2000).  Economic dependence exists
with this identified customer.  Loss of the
customer may imply a significant adverse to the
financial position of the Company.
2001
Domestic	Foreign		Other
Total Assets $0	          $ 3,117                		-                $3,117
Sales, net	-               10,425
	      -               10,425
Gross Margin -		    1,138
		-                1,138
Net income (loss)
	    (141)		      (151)
           -		    ( 292)

2000
Assets   $       0	   $  2,839
        $   -                $ 2,839
Sales, net   0                9,117		      -  	            9,117
Gross Margin 0 		        404		      -	              404
Net loss  1,059		      (1,366)
	   -      		      307

11.    COMMITMENT
The Company leases premises under an operating
lease with a four year term in Canada and
shares the facilities for its Hong Kong
operation.  Rent expense during the 12 months
ended December 31, 2001 was approximately
$108,000.  Minimum lease commitments under the
leases at December 31, 2001 were:
12 months				$107,000
24 months				$107,000
36 months				$122,000
48 months				$ 65,000						$401,000



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