United States
                    Securities and Exchange Commission
                          Washington, D.C. 20549
                         ------------------------
                                Form 10-KSB

  [X] Annual Report Pursuant to Section 13 or 15(d) of the Securities
      Exchange Act of 1934

      For the Fiscal Year Ended June 30, 2004

  [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
      Exchange Act of 1934

      For the Transition Period from_________to__________

                      Commission File Number 0-50340

                      Heritage Scholastic Corporation
          (Exact Name of Registrant as Specified in its Charter)

               Nevada                                    33-0675154
   (State or other jurisdiction of                    (I.R.S. employer
    incorporation or organization)                  identification number)

  1991 Village Park Way, Suite A, Encinitas, California       92024
         (Address of principal executive offices)           (Zip code)


 Registrant's Telephone Number, Including Area Code: (760) 635-8545

Securities Registered Pursuant to Section 12(b) of the Act: NONE

        Securities Registered Pursuant to Section 12(g) of the Act:
       Common Stock, $0.001 par value per share, 100,000,000 shares
         authorized, 7,919,875 shares issued and outstanding as of
                            September 20, 2004.

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.  Yes [X]  No [ ]

Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-B is not contained herein,
and will not 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-KSB or any amendment to
this Form 10-KSB.  [ ]

State issuer's revenues for its most recent fiscal year: $0.

The aggregate market value of the voting stock held by non
affiliates computed by reference to the price at which the stock
was sold, or the average bid and asked prices of such stock as of
September 24, 2004 was $0.20, based on the last sale price of
$0.20 as reported by the NASD Over the Counter Bulletin Board.

As of September 24, 2004, Registrant had outstanding 7,919,875
shares of common stock, its only class of common equity outstanding.

Transitional Small Business Disclosure Format (Check one): Yes [ ] No [ X ]


/1/


                             TABLE OF CONTENTS



                                                                          Page

Part I                                                                      3

 Item 1.  Description of Business                                           3

 Item 2.  Description of Property                                          10

 Item 3.  Legal Proceedings                                                11

 Item 4.  Submission of Matters to a Vote of Security Holders              11

 Item 5.  Market Price of and Dividends on the Registrant's                11
          Common Equity and Related Stockholder Matters


Part II                                                                    16

 Item 6.  Management's Discussion and Analysis or Plan of Operation        16

 Item 7.  Financial Statements                                             21

 Item 8.  Changes in and Disagreements with Accountants on                 38
          Accounting and Financial Disclosure

 Item 8A. Controls and Procedures                                          38


Part III                                                                   41

 Item 9.  Directors and Executive Officers, Promoters and Control Persons; 41
          Compliance with Section 16(a) of the Exchange Act

 Item 10. Executive Compensation                                           42

 Item 11. Security Ownership of Certain Beneficial Owners                  43
          and Management and Related Stockholder Matters

 Item 12. Certain Relationships and Related Transactions                   44

 Item 13. Exhibits and Reports on Form 8-K                                 45

 Item 14. Principal Accountant Fees and Services                           45

          Signatures                                                       47


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     Some of the statements contained in this Form 10-KSB are not
historical facts rather "forward-looking statements" which can be
identified by the use of terminology such as "estimates,"
"projects," "plans," "believes," "expects," "anticipates,"
"intends," or the negative of such terms or other variations, or
by discussions of strategy that involve risks and uncertainties.
Caution should be exercised in regards to these forward-looking
statements.  Such statements contained herein reflect our current
beliefs with respect to future events.  These beliefs involve
known and unknown risks, uncertainties and other factors,
including, but not limited to, economic, competitive, regulatory,
technological, key employee and general business factors
affecting our operations, market growth, services, products and
licenses.  No assurances can be given regarding the achievement
of future results.  Actual results may differ materially as a
result of the above-mentioned risks, and from assumptions made
based on anticipated events.  Factors that could cause or
contribute to such differences include, but are not limited to,
those discussed in the Risk Factor section of this document and
in Item 6, "Management's Discussion and Analysis of Financial
Condition or Plan of Operation."

                             PART I

Item 1.     Description of Business

A.   Business Development and Summary

     We were incorporated as a Nevada Corporation on July 30,
1999.  Our principal business objective is to secure a leading
position in the supplemental educational materials market.  We
plan to publish and distribute supplemental history textbooks for
grades K through 12.  Our supplemental textbooks are unique in
that each book focuses on the history of the city in which it is
distributed.  We will use corporate sponsorship to fund the
publishing and distribution costs of our textbooks.  As an
incentive for covering these costs, each sponsor's name will be
placed in the front of each textbook.  The completed textbooks
will then be donated to school districts.

     The prototype of our first supplemental textbook, which is
targeted at 3rd graders, was completed in July of 2001.  It was
sent to the Los Angeles Unified School District for review.  In
the second quarter of 2001 we began negotiations with several
school districts, including Los Angeles, San Diego, Chicago and
New York.  Each district has indicated an interest in receiving
our supplemental educational materials subject to acceptance by
their respective review committees.  Once the approvals are in
hand, we intend to approach businesses, philanthropic
organizations, and other interested parties in the respective
cities to sponsor the placement of our textbooks in the schools.

      We received in September 2002 the initial run of 1,500
copies of our Los Angeles prototype textbook. This book will be
used in negotiations with other cities as well.  We expect these
negotiations to proceed to a conclusion over the next several
months.  We expect to have our first supplemental textbook in the
classrooms of the 77,000 third-grade students in the Los Angeles
Unified School District within the next twelve months.  We
received the final approval from the Los Angeles Unified School
District for adoption as a supplemental text in the quarter ended
March 31, 2003.  Though June 30, 2004, Heritage Scholastic has
received orders for 1,653 of our supplemental textbooks.

     In addition, we plan to provide testing and customizable
teaching aids via www.heritagescholastic.com, our Internet Web
site that will be worked on next year, which is currently under
development, which will allow us to provide promotional links to
the sponsoring corporations.  We are currently soliciting
comments from teachers that will provide us guidance on how to
best develop our Web site, and have it operational on a very
limited test basis.  We have not planned for any further
development until 2005.  While the Company's main source of
revenue is the textbooks themselves, which will be sponsored by
sponsoring companies, we plan to sell the teachers' reference
texts directly to the school districts and the individual
teachers.  They will have the option of purchasing a print
version or an online version of the text.  It is, however,
possible that organizations may decide in the future to sponsor
these teaching aids as well.


/3/


B.   Business of Issuer

 (1)  Principal Products and Principal Markets

      We expect that most of our printed products will be
printed by third party printers.

      We expect that both the paper and the ink utilized by our
publication will be provided by the printers of our publication
and included in the cost of print production.  Both paper and ink
are commodity products that are affected by demand, capacity and
economic conditions.  We expect that adequate sources of supply
will be available to fulfill our future requirements.

     We expect that our own staff will edit the manuscripts of
the authors of the books we publish.  We plan to utilize
freelance resources when workload exceeds in-house capacity.  We
expect to utilize outside experts when necessary to ensure
technical accuracy of content and compatibility with final
published software.  We plan to employ state-of-the-art desktop
publishing technology to graphically design book content, create
graphics and prepare the typographic layout for the book.  We
anticipate that final electronic files for all text and cover
material to be delivered to printers for reproduction via direct
line and Internet connection.

      We expect that our target markets will vary depending on
each specific product line.  Principal customers of our textbooks
include teachers, school and school district-level
administrators, librarians, other educational professionals and
parents.

 (2)  Distribution methods for our products

     Our objective is to become a leading publisher of
supplemental education materials for the United States education
system.  This market has experienced strong growth in recent
years.  We believe that the use of supplemental education
materials will continue to increase as more schools are being
built and additional teachers are being hired to handle the
increasing student population.

     We seek to establish Heritage Scholastic as the leading
brand for supplemental education materials in the kindergarten
through twelfth grade education market segment.  To achieve this
objective, we plan to market our products through targeted
advertising, public relations and other marketing activities
designed to promote Heritage Scholastic as a national brand
within the education industry.

     Our initial target markets include Los Angeles, San Diego,
Chicago, New York and Boston.  It is our objective to expand into
3-5 additional markets by the end of the fourth year.

      Corporate sponsors will be solicited to purchase the
textbooks, which Heritage Scholastic will then provide to the
school districts for distribution to the classrooms.  Sponsors
will receive acknowledgement of their scholastic support either
on the cover or in the front of the textbook.  Based on our
review of comparable textbooks, we anticipate setting the
sponsor's price at between $10 and $18 per textbook, which
equates to 40-70 percent of the estimated retail price.

     The renaming of numerous public sports facilities such as
Bank One Ballpark in Phoenix and Qualcomm Stadium in San Diego,
and the renaming of major sporting events such as the Fed Ex
Orange Bowl and the Tostitos Fiesta Bowl indicates that large
companies are willing to allocate millions of dollars annually to
advance their corporate image or enhance their brand name
recognition and are often seeking additional platforms to build
public loyalty to their products.  We expect companies to eagerly
embrace the concept of allocating funds to provide a heightened
corporate image to the students and parents of students who use
their products.  Cost to sponsor can be tailored to their budget
by offering sponsorships of larger or smaller school districts,
or regions.


/4/


     Classic advertising theory holds that the most opportune
time to advertise is when the economy is weak.  Although, all
companies may not adhere to this theory, we believe that
sufficient numbers of businesses and philanthropic organizations
will continue to invest capital in a recovering economy.  In
addition, we believe the emphasis on education as exemplified by
the most recent Presidential election makes our textbooks a
particularly attractive alternative to mainstream advertising
methods.

   Establish our name

     We cannot guarantee that we will be able to successfully
market and distribute our services, and the failure to do so
could have an adverse effect on our operations.  We believe that
building awareness of Heritage Scholastic's educational materials
is important in establishing and expanding our customer base.  We
currently have a Web site operational on a very limited test
basis.  We will also use traditional media, as our revenues
permit, to attract new customers.  When we resume working on our
Web site next year we plan to allow potential purchasers of
educational materials to find the content and quality of
materials they require, advertisers to have access to a consumer
base in a specific market niche, and provide an opportunity to
establish the Heritage Scholastic brand name.

  (3) Status of any announced new products

   As of June 30, 2004 we have:

     1. Developed and implemented a business plan;
     2. Recruited and retained an appropriate management team;
     3. Attained capital as a result of a private offering of our
        common stock (see Part II Item 4 Recent Sales of Unregistered
        Securities); and
     4. Completed production of 1,500 copies of the supplemental
        educational textbook for the County of Los Angeles School
        District to be presented to corporate sponsors.
     5. Received orders for 1,653 copies of the Los Angeles book
        from corporate sponsors and bookstores in the Los Angeles area.

     We believe the capital raised through the offering of our
common stock and additional future offerings that we plan to do
plus the cash flow generated by revenues will be sufficient to
cover our current monthly expense, which is less than $2,000 per
month, exclusive of management's salaries.  Going forward
management's salaries will continue to be deferred until the
Company has sufficient cash flow to afford them.  Expenses will
not increase until sales and cash flow permit.

      We expect the industry to become increasingly competitive,
despite the size and growth expected in the market.  We intend to
compete by targeting specific market segments such as school
districts whose stock of textbooks is either in need of
replacement or updating.  Our main goal is to ensure client
satisfaction with our textbooks and to develop an outstanding
reputation for quality.  If we fail to market and distribute our
textbooks and generate sufficient revenues, we may be unable to
continue as a going concern.

  (4)  Industry background


The Traditional Education Industry

     The estimates and statistics referenced in this section and
the sections entitled "Kindergarten through Twelfth grade (K-12)
Education Materials Market" and "Basal Materials" immediately
following this section were obtained from the following sources:


/5/


     1. The U.S. Department of Education Web site;
     2. The International Data Corporation Web site; and
     3. Simba Information Inc.'s Print Publishing for the School
        Market (1998 - 2000 edition).

     The education market is the second largest sector of the
U.S. economy, with an estimated $800 billion, or approximately
10% of the U.S. gross domestic product, spent on education in
2000.  The U.S. Department of Education estimates that
approximately $400 billion was spent in the United States during
the 1999-2000 school year in the kindergarten through twelfth
grade (K-12) sector on behalf of the 53.5 million students
enrolled in over 119,000 public and private K-12 schools in more
than 15,000 school districts.

     We estimate that the K through 12 education materials market
segment had approximately $8.5 billion in sales of products and
related services in 2000.  The supplemental education materials
segment of the overall education materials market, which was
approximately $4.3 billion in sales in 2000, representing 58% of
the overall K-12 education materials market, with the remainder
consisting of the approximately $4.2 billion basal materials
segment.  The basal materials segment of the overall education
materials market primarily consists of textbook programs that
include student editions, teacher editions and companion
materials to teach particular subject areas, with each "edition"
offering a grade-specific textbook for particular subject areas
such as history, math and science.

     Growth in the education materials market is expected to continue
to be driven by several factors, including:

  a) Increasing kindergarten through twelfth grade student
     enrollment;
  b) Additional educational spending fueled by public concern
     over the quality of education in the United States;
  c) The increasingly diverse sources of education funding;
  d) Teachers and school and school district-level administrators
     using a greater amount of supplemental education materials to
     improve student performance, as they are increasingly held
     accountable for student achievement;
  e) A growing acceptance among teachers of theories of teaching
     that support the use of different instructional methods to
     accommodate the many ways in which students learn; and
  f) Corporate Sponsorship of education.

      The supplemental education materials market is highly
competitive and we face significant competition within our
particular field of product offerings.  It is unclear whether we
will be able to compete successfully.  Several of our competitors
are larger, with greater financial and other resources.  In
addition, our strategy to capitalize on any growth in the
supplemental education materials market may be limited to the
extent that growth occurs in segments that are not currently the
focus of our product portfolio, necessitating the development of
new products.  In this respect, we may be at a competitive
disadvantage with entities that already offer these products, are
able to develop new products faster or have superior products.

      We expect to compete on the basis of editorial quality,
timely introduction of new titles, product positioning, pricing,
brand name recognition and corporate sponsorship.

      Unless otherwise specified, all industry and market data,
including industry data concerning the size of the industry,
numbers of schools, teachers and libraries, are based on
management estimates, market research, publicly available
sources, and a variety of industry publications.  The statements
made above concerning the size of the supplemental education
materials market, are management estimates based on a review of
available information, and are not derived from any single
industry source.


/6/


      Industry publications generally state that the information
contained in them has been obtained from sources believed to be
reliable, but that the accuracy and completeness of the
information is not guaranteed.  Similarly, market research, and
publicly available sources, while believed to be reliable, have
not been independently verified, and no representations as to the
accuracy or completeness of the information are being made.
Unless otherwise indicated, "schools" refers to all public and
private schools for all K through 12 students in the United
States and "teachers" refers to teachers in those schools.


Kindergarten through Twelfth grade (K-12) Education Materials Market

      The K-12 education materials market serves the
approximately 119,000 public and private K-12 schools and school
libraries in the United States.  Teachers and school-level
administrators, primarily make purchasing decisions for
supplemental education materials.  Decisions for the purchase of
basal materials are typically made at the school district level.
Funding for education materials comes from a variety of federal,
state and local sources.  Some of these sources are allocated for
specific uses, such as to improve reading or increase access to
technology, depending on the policy objectives of the funding
source.

      The K-12 education materials market has grown and is
expected to continue to grow, due to a number of factors,
including the factors described below.

  Increasing Student Enrollment - As student enrollment rises,
school districts must increase expenditures to purchase education
materials for the new students.  Student enrollment in K-12
grades has grown from approximately 49 million students in the
1993-1994 school year to approximately 60 million in the 1999-
2000 school year.  The National Center for Educational Statistics
estimates student enrollment will continue to grow every year
until at least 2009.

  Growing Number of New Teachers - According to a report by the
1997 President's Committee of Advisors on Science and Technology,
Panel on Educational Technology, over 200,000 new teachers will
enter the profession annually for the next 15 years.  Many states
are accelerating their teacher workforce recruitment efforts to
effectively educate the growing student population.  Many school
districts authorize teachers to select new education materials
for their curriculum.  Teachers are often more open to new
methods of teaching and new types of instructional materials.

      The number of new teachers in any year is due to both an
increase in the number of teachers and to turnover among current
teachers.  The number of K-12 teachers has grown from
approximately 3.5 million in the 1993-1994 school year to
approximately 4.8 million in the 1999-2000 school year.  The
National Center for Educational Statistics estimates the number
will continue to increase each year through at least the 2005-
2006 school year.  This growth has been driven by increasing
student enrollment and, to a lesser extent, by recent initiatives
to maintain or decrease the student to teacher ratio in
elementary schools, generally in kindergarten through third
grade.

  Increasing Spending/Funding - Partially as a response to a
growing interest among parents in the quality of education,
average spending per pupil for educational materials, as well as
the type and amount of funding, has been increasing and is
expected to continue to increase, particularly for supplemental
education materials.  Since the early 1990s, government policy
and funding has supported the increased use of technology in
education, a key driver of growth in the supplemental education
materials segment.  One of the results of this policy was The
Technology Literacy Challenge Fund, a five-year, $2.0 billion
Federal fund initiated in 1995 that has been providing grants to
state education agencies to support grassroots efforts at the
state and local levels to meet national education goals.  The
average spending per student including educational materials in
elementary, middle and secondary schools has grown from $5,934
per student in 1995 to $6,723 in 2000.  The National Center for
Educational Statistics estimates average spending per pupil grew
to $7,927 in 2003.


/7/


  Increasing School-Level Decision Making - There has been a
trend toward more school-level decision making for the
supplemental education materials segment.  This trend is a result
of the belief that localized decision-making is better able to
match students' needs with the materials being provided.  This
trend is consistent with the increased accountability being
demanded of schools and teachers, each of whom are increasingly
being given the right to make decisions but also are being held
responsible for the results.

  Increasing Length of School Day - Over 30% of school districts
in the United States have extended day programs, a high
percentage of which are located in urban schools, and an
increasing number of these programs include an instructional
component.  These programs lengthen the school day and require
the expenditure of additional funds for their operation,
including for education materials.

  Developing Parent Market - Due to the growing interest in the
child's education among parents there is a rapidly developing
market of parents seeking education materials, which we believe
will contribute to future growth in this market.  A significant
part of this developing market is due to parents of children in
public and private schools buying supplemental instructional
materials to use in their homes to augment their children's
education.  In addition, part of this developing market is due to
the trend toward more home schooling.  In 1993, it became legal
in all 50 states for parents to teach their children at home.  In
the 1999-2000 school year, there were an estimated 1-1.2 million
children receiving home schooling.


Basal Materials

     The approximately $4.2 billion basal materials segment of
the overall education materials market primarily consists of
textbook programs that include student editions, teacher editions
and companion materials to teach particular subject areas, with
each program offering a grade-specific textbook in the subject
area for a span of grades.  Basal materials are generally
designed to be useful for a period of five to seven years before
requiring a major revision.  Basal textbooks are typically
purchased at the school district level, often using textbook
selection committees that include administrators, teachers and,
occasionally, parents.

     School districts may purchase textbooks in any given subject
area for one or more of the grades for which textbooks in a
program are available and usually employ a selection process that
can be lengthy and time consuming for publishers.  Most states
and districts earmark a certain portion of their education funds
specifically for textbooks.

     The processes and practices used in selecting and adopting
textbooks vary by state.  Twenty-two states, mostly in the
Southern and Western United States, make available all or a
portion of their textbook funds only for approved textbooks.
These states have statutes that provide procedures for the
approval and selection of textbooks for use in each state school.
In general, most states with statutes governing adoption of
textbooks use textbook selection committees to approve textbooks.
These committees typically include teachers and administrators,
and sometimes parents.  Textbooks are reviewed according to a
list of specific curricular requirements developed by the state
and made available to publishers well before the selection
process begins. Once the review is concluded, the committee
"lists" approved textbooks.  The actual selection of textbooks is
left to individual districts.  School districts may purchase "off-
list" texts, but may receive reduced or no funding from the state
textbook funding source for these purchases.  In states without
statutes governing the approval and selection of textbooks, each
school district generally selects and adopts textbooks for the
school district without using any approved list.


/8/


     A significant number of states require that "core" textbooks
satisfy specific criteria, and textbook publishers must incur
significant up-front costs to produce materials that meet these
standards before they know whether their products will be adopted
and purchased.

     Supplemental education materials are intended to address
individual needs or to supplement parts of the curriculum and
have not been the subject of the formal approval process that
many states use for "core" textbooks, which are focused on
standards for the entire population of students.

  (5)  Raw materials and suppliers

     Our company is neither a purchaser nor a supplier of raw materials.

  (6)  Customers

     We  generated no revenue for the year ended June  30,  2004.
Even  though we generated a small amount of revenue for the  year
ended  June  30,  2003,  we continue to be  a  development  stage
company  as  our primary focus is raising capital and  attracting
business.  We believe that our ability to establish and  maintain
long-term  relationships with our clients  and  encourage  repeat
business  depends,  in  part, on the  strength  of  our  customer
support  and  service operations and staff.   We  value  frequent
communication with and feedback from our future clients in  order
to  continually improve our products.  Our goal is  to  become  a
leading  publisher  of supplemental education materials  for  the
United   States  education  system.   In  addition,  our   future
operating results may also fluctuate due to factors such  as  the
gain or loss of significant clients and the pace of growth in the
education industry.

  (7)  Patents, trademarks, licenses, franchises, concessions,
       royalty agreements, or labor contracts, including duration

     We may be required to license products or services in the
future, for use in the general operations of our business plan.
We cannot assure you that these third party licenses will be
available or will continue to be available to us on acceptable
terms if at all.  The inability to enter into and maintain any of
these licenses could have a material adverse effect on our
business, financial condition or operating results.  In addition,
policing unauthorized use of our proprietary and other
intellectual property rights could be expensive if not difficult
or impossible.

     We cannot guarantee that third parties will not bring claims
of copyright or trademark infringement against us or claim that
certain aspects or other features of our textbooks violates a
patent they may hold.  There can be no assurance that third
parties will not claim that we have misappropriated their
creative ideas or formats or otherwise infringed upon their
proprietary rights.  Any claims of infringement, with or without
merit, could be time consuming to defend, result in costly
litigation, divert management attention, or require us to enter
into costly royalty or licensing arrangements.  These potential
legal issues could have a material adverse effect on our
business, financial condition or operating results.

  (8)  Regulation

      We are not currently subject to direct regulation by any
domestic or foreign governmental agency, other than regulations
applicable to businesses generally and laws or regulations
directly applicable to the industry.

      (9)  Effect of existing or probable government regulations


/9/


      We believe that we will be able to comply in all material
respects with the laws and regulations governing the industry,
and that such laws will not have a material effect on our
operations.  However, various federal and state agencies may
propose new legislation that may adversely affect our business,
financial condition and results of operations.  We are not aware
of any probable government regulations that may adversely affect
our business.

 (10) Research and development activities

      We seek to continue developing our products internally
through research and development or if appropriate, through
strategic partnerships.  But, if we can purchase or license
products, services or technologies from third parties at a
reasonable cost, we will do so in order to avoid the time and
expense involved in developing such products, services or
technologies.  As of the date of this filing, we have not
incurred any Research and Development expenses.

 (11) Cost and effects of compliance with environmental
laws (federal, state and local)

      We believe environmental laws do not impact us in our
business.

 (12) Employees

      We currently employ a President/CEO, Vice-
President/Secretary, and CFO/Treasurer.  Their contract, which
were set to expire May 1, 2004 have been extended on a month-to-
month basis. We have hired as an independent agent a salesperson
in the first quarter of FYE 2005.  The book editors and authors
are currently independent contractors.  It is anticipated that
this relationship may change to one of employee/employer in FYE
2005.  Currently, there exist no organized labor agreements or
union agreements between Heritage Scholastic Corporation and its
employees.  We believe that our relations with our employees are
good.  Charles E. Parks, President, Lori M. Parks, Secretary, and
Randall L. Peterson, Treasurer, currently have part-time
employment contracts with the Company.  All three contracts were
dated May 1, 2002 and are for a term of two years from the date
of the contract.  The contracts were renewed for one year.  We
expect all three employees to become full time in late FYE 2005
and will pursue securing key man life insurance at that time.
      The success of our Company depends upon the efforts,
abilities and expertise of our executive officers and other key
employees, including our Chief Executive Officer and President,
CFO and Treasurer, Vice President and Secretary, and the Vice
President of our Sales unit.  The loss of the services of such
individuals and/or other key individuals could have a material
adverse effect on our operations.

Item 2.     Description of Property

A.   Description of Property

      Our corporate office is located at 1991 Village Park Way,
Suite A.  We rent an "executive suite" for a monthly rent of
$100.  The lease is month-to-month.  Additionally, there are
currently no proposed programs for the renovation, improvement or
development of the property currently being utilized.

      B.   Investment Policies

      Management does not currently have policies regarding the
acquisition or sale of assets primarily for possible capital gain
or primarily for income.  We do not presently hold any
investments or interests in real estate, investments in real
estate mortgages or securities of or interests in those persons
primarily engaged in real estate activities.


/10/


Item 3.     Legal Proceedings

      We are not currently involved in any legal proceedings nor
do we have any knowledge of any threatened litigation.

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

           No matters were submitted to a vote of our
shareholders during our fiscal year ended June 30, 2004.


                             PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

     Description of Securities

     The authorized capital stock of our Company consists of
100,000,000 shares of common stock, $0.001 par value per share,
and 20,000,000 shares of preferred stock, $0.001 par value per
share.  The following summary of certain provisions of the common
stock of our Company does not purport to be complete and is
subject to, and qualified in its entirety by, the provisions of
our Articles of Incorporation, and the Amendment to our Articles
of Incorporation, which are included as exhibits to this document
and by the provisions of applicable law.

Common Stock

     As of June 30, 2004, the Company has 7,919,875 shares of
common stock issued and outstanding.  As a holder of our common
stock:

  (a)  you have equal rights to dividends from funds legally
       available, ratably, when as and if declared by our Board of
       Directors;
  (b)  you are entitled to share, ratably, in all of our assets
       available for distribution upon liquidation, dissolution, or
       winding up of our business affairs;
  (c)  you do not have preemptive, subscription or conversion
       rights and there are no redemption or sinking fund provisions
       applicable;
  (d)  you are entitled to 1 vote per share of common stock you
       own, on all matters that stockholders may vote, and at all
       meetings of shareholders; and
  (e)  your shares are fully paid and non-assessable.
       Additionally, there is no cumulative voting for the election
       of directors.

Preferred Stock

     The preferred equity securities authorized to be issued
under the Articles is comprised of 20,000,000 shares of the
preferred stock, $0.001 par value.  As of the date of this
filing, our Company has issued no preferred shares.  Preferred
shares may be issued in one or more series by the board of
directors of the Company and such board has the authority to
alter any and all rights or preferences, privileges and
restrictions granted to or imposed upon any wholly unissued
series of common stock, and to fix, alter or reduce (but not
below the number outstanding) the number of preferred shares
comprising any such series and the designation thereof, or any of
them, and to provide for the rights and terms of redemption or
conversion of the shares of any series.


/11/


Nevada Anti-Takeover Provisions

     The anti-takeover provisions of Sections 78.411 through
78.445 of the Nevada Corporation Law apply to Heritage Scholastic
Corporation Section 78.438 of the Nevada law prohibits us from
merging with or selling Heritage Scholastic Corporation or more
than 5% of our assets or stock to any shareholder who owns or
owned more than 10% of any stock or any entity related to a 10%
shareholder for three years after the date on which the
shareholder acquired the Heritage Scholastic Corporation shares,
unless the transaction is approved by the Board of Directors of
Heritage Scholastic Corporation.  The provisions also prohibit us
from completing any of the transactions described in the
preceding sentence with a 10% shareholder who has held the shares
more than three years and its related entities unless the
transaction is approved by our Board of Directors or a majority
of our shares, other than shares owned by that 10% shareholder or
any related entity.  These provisions could delay, defer or
prevent a change in control of Heritage Scholastic Corporation.

Recent Sale of Unregistered Securities

Common Stock

     On July 30, 1999, we were incorporated under the laws of the
State of Nevada as Heritage Scholastic Corporation.  We are
authorized to issue 100,000,000 shares of Common Stock, par value
$0.001.

     At a Special Meeting of the Board of Directors in July 2000,
we issued 2,750,000 shares of our $0.001 par value Common Stock
to Charles E. Parks in exchange for cash in the amount of $2,750;
and 2,750,000 shares of our $0.001 par value Common Stock to Lori
M. Parks in exchange for cash in the amount of $2,750.

     At a Special Meeting of the Board of Directors in September
2000, we issued 600,000 shares of our $0.001 par value Common
Stock to Randall L. Peterson in exchange for cash in the amount
of $1,800.

     At a Special Meeting of the Board of Directors in August
2001, we issued 300,000 shares of our $0.001 par value Common
Stock to Steven Hung for cash in the amount of $12,000.

     At a Special Meeting of the Board of Directors in September
2001, we issued 250,000 shares of our $0.001 par value Common
Stock to Rocky K. Copley for cash in the amount of $10,000,
125,000 shares of our $0.001 par value Common Stock to Helen
Reardon for cash in the amount of $5,000, 1,875 shares of our
$0.001 par value Common Stock to Sharen P. Anderson for cash in
the amount of $75, 1,875 shares of our $0.001 par value Common
Stock to Alicia N. Anderson for cash in the amount of $75, and
1,875 shares of our $0.001 par value Common Stock to Elias E.
Anderson for cash in the amount of $75.

     The above referenced issuances transacted from July 2000 to
September 2001 were made in accordance with Section 4(2) of the
Securities Act of 1933, as amended, which exempts from
registration transactions by an issuer not involving a "public
offering."

     During June 2002, we completed an offering that was
registered with the State of Nevada pursuant to NRS 90.490 and
was exempt from federal registration pursuant to Regulation D,
Rule 504 of the Securities Act of 1933, as amended.  We sold
558,250 shares of our $0.001 par value common stock at a price of
$0.10 per share to 54 individuals for total cash of $55,825.


/12/


     In addition, we issued 275,000 shares to one shareholder in
lieu of services rendered in the amount of $27,500.  The issuance of
shares represented payment to Corporate Regulatory Services, a
consulting company, for facilitating the preparation of the
documentation necessary to become a publicly traded company.
Also, we issued 5,000 shares to one shareholder in lieu of
services rendered in the amount of $500.  The issuance of shares
represented payment to Steve Schaad, an individual, for acting as
the Series 63 licensed Agent of the Issuer for our common stock
offering.

      On November 27, 2002 the Company issued 50,000 shares of
common stock to an investor for cash of $0.10 per share.

      On February 8, 2003 the Company issued 50,000 shares of common
stock to an investor for cash of $0.10 per share.

      On March 30, 2003 the Company issued 200,000 shares of common
stock for services provided with a fair value of $20,000.

      On December 31, 2003 the Company issued 1,000 shares of common
stock to an investor for cash of $0.10 per share.

      For our public offering of securities, we relied upon the
following facts to determine that the offers and sales
were exempt from registration:

   1. We were pursuing a specific business plan, and were not a
      blank check or "Shell" company;

   2. For the period of 12 months prior to the sale, we had raised
      less than $1,000,000 from the sale of our securities; and

   3. At the times of the sales, we were not subject to the
      reporting requirements of Sections 13(d) or Section 15 of the
      Securities and Exchange Act of 1934.

      Therefore, based on the facts above, we were able to determine
that we could sell securities pursuant to Rule 504 of Regulation D.

A.    Market Information

      Our common stock has been traded on the Over-the-Counter Bulletin
Board ("OTCBB") since February 2004 under the symbol "HGSC" or
"HGSC.OB" The following table sets forth the trading history of
our common stock on the OTCBB for each quarter as reported by
Yahoo Finance Historical Prices (finance.yahoo.com). The
quotations reflect inter-dealer prices, without retail mark-up,
markdown or commission and may not represent actual transactions.


                        QUARTER ENDING      HIGH         LOW
                          ---------         -----       -----
                          3/31/2004         $0.30       $0.15
                          6/30/2004         $0.51       $0.20


/13/


     The Company has outstanding stock option grants, which have
not vested to date.  The stock options are convertible into
shares of the common equity of the Company as follows:

                               STOCK OPTION PLAN

Stock Option Grants - at 07/1/01
Strike Price: $0.10

Heritage Scholastic Corporation
Total Stock Issued to Date: 7,918,875
Options Available for Issuance under Plan: 1,500,000
Options vested to date: 250,000

       OPTIONS

Plan#  Name           Quantity      Vesting 1      Vesting 2       Vesting 3


 1     Betsy          150,000     40%  1/01/03    50%  7/01/04    10% 7/01/05
       Blondin

 2     Deborah        150,000     40%  1/01/03    50%  7/01/04    10% 7/01/05
       Sherwood

 4     Gina           150,000     40%  1/01/03    50%  7/01/04    10% 7/01/05
       Mancini

 5     Juan            75,000     40%  1/01/03    50%  7/01/04    10% 7/01/05
       Diaz

 6     Randall        100,000     40%  1/01/03    50%  7/01/04    10% 7/01/05
       Peterson

 7     Ron            150,000     40%  1/01/05    50%  7/01/05    10% 7/01/06
       Beers

 8     Randall        700,000     40%  1/0105     50%  7/01/05    10% 7/01/06
       Peterson
                    ---------
            Total   1,475,000

(1)  This table does not include 445,000 options that were
forfeited under terms of the plan.  These options were granted to
non-employees as long as they were employed by the related
entities, HMC or Imprint Publications LLC.  The options forfeited
reflect options of those non-employees that have terminated their
employment with the related entities, HMC or Imprint Publications
LLC.


/14/


(2)  There were no options granted to employees.

     There are currently 939,250 shares of our common stock which
are freely tradable and which are held of record by 67
individuals.  The remaining 6,980,625 shares will become freely
tradable in accordance with the requirements of Rule 144.  Any
shares held by "affiliates" of us, which would otherwise be
freely tradable, will be subject to the resale limitations under
Rule 144.  In general, under Rule 144, as currently in effect, a
person, or persons whose shares are aggregated, who has
beneficially owned shares for at least one year would be entitled
to sell, within any three month period, that number of shares
that does not exceed the greater of one percent (1%) of the then-
outstanding shares of common stock and the average weekly trading
volume in the common stock during the four calendar weeks
immediately preceding the date on which the notice of sale is
filed with the Securities and Exchange Commission, provided
certain manner of sale and notice requirements and public
information requirements are satisfied.

     In addition, affiliates of ours must comply with the
restrictions and requirements of Rule 144, other than the one-
year holding period requirement, in order to sell shares of
common stock.  As defined in Rule 144, an "affiliate" of an
issuer is a person who, directly or indirectly, through the use
of one or more intermediaries controls, or is controlled by, or
is under common control with, he issuer.  Under Rule 144(k), a
holder of "restricted securities" who is not deemed an affiliate
of the issuer and who has beneficially owned shares for at least
two years would be entitled to sell shares under Rule 144(k)
without regard to the limitations described in the paragraph
above.

B.    Holders

     As of June 30, 2004, we have 76 stockholders of record.

C.    Transfer Agent and Registrar

     The Transfer Agent for the shares of common stock of
Heritage Scholastic Corporation is Shelley Godfrey, Pacific
Stock Transfer Company, 500 E. Warm Springs Road, Suite 240, Las
Vegas, Nevada 89119, (702) 361-3033.

D. Dividends

     We have not paid cash dividends on our Common Stock and do
not intend to pay any cash dividends for the foreseeable future.



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/15/


                             Part II

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

                   FORWARD LOOKING STATEMENTS

     The statements contained in this report that are not
historical facts are forward-looking statements within the
meaning of the Private Securities Litigation Reform Act.  Forward-
looking statements are made based upon management's current
expectations and beliefs concerning future developments and their
potential effects upon the Company.  There can be no assurance
that future developments affecting the Company will be those
anticipated by management.  Actual results may differ materially
from those included in the forward-looking statements.

     Readers are also directed to other risks and uncertainties
discussed in other documents filed by the Company with the
Securities and Exchange Commission.  The Company undertakes no
obligation to update or revise any forward-looking information,
whether as a result of new information, future developments or
otherwise.

General

  (1)    Heritage Scholastic Corporation is considered a
development stage company.  We have had limited revenue, and
activities since our inception have been devoted primarily to
raising capital and creating a textbook.  We have begun to focus
on developing the market for this textbook.  As a result, we are
a development stage enterprise as defined by SFAS 7.  In our
most recent operating period ended June 30, 2004, we recognized
$0 in revenue.  In the 12 month period ended June 30, 2003 we
recognized $8,400 in revenue.  There was no revenue recognized
for periods before 2003.  Accordingly, due to the Company's
status as a development stage company, negative working capital,
and continued losses, our auditors have issued a comment
regarding our ability to continue as a going concern (please
refer to the footnotes 1 and 2 of the consolidated financial
statements).  Management intends to use capital and debt
financing as needed to supplement the cash flows generated by
the future sale of our products, if any.  Our fixed and variable
expenses and our ability to control them are as follows:

        Classification       Fixed /       Ability to Control
                             Variable

    Employee Wages and     Salary =      Can reduce through lay
    Benefits               Fixed         off of personnel or
                           Hourly =      outsourcing certain
                           Variable      processes
    Subcontractor Expense  Fixed         Can reduce through
                                         discontinuation or
                                         restructuring of
                                         agreements
    Accounting and Legal   Variable      Will increase as
    Expenses                             Company becomes fully
                                         reporting
    Building Rental        Fixed         Little control over,
    Expense                              per agreement
    Utilities              Variable      May fluctuate due to
                                         seasonality
    Business Insurance     Fixed         Will increase when
                                         `Key Man" life
                                         insurance is obtained
    Material Costs         Variable      Can control through
                                         the use of large-scale
                                         purchase agreements
                                         for paper and ink.
    Misc. Office Supplies  Variable      Can control through
    & Shipping                           reduced office supply
                                         requisitions,
                                         negotiating
                                         alternative shipping
                                         solutions


/16/


     To date, our efforts have been primarily focused on
developing demand for our products, implementing our business
strategy and raising working capital through equity
financing.  Our ability to generate revenues is primarily
dependent upon our ability to cost-effectively and
efficiently develop and market our products.  Our priorities
for the next six to twelve months of operations are to:

     1. Implement a marketing strategy to reach target markets;
     2. Develop and strengthen strategic relationships;
     3. Respond to competitive developments; and
     4. Establish our brand identity.

     In order to make the most efficient use of the capital
available to us, we plan to print our textbooks when we have
orders from the sponsors in hand.  Standard terms will
include a down payment with the order, which is typical in
this industry.  This down payment will be sufficient to cover
the hard costs to publish the books as well as the initial
operating expenses.  Once the books are published the balance
owing on the contracts with the sponsors will be due and
payable.  These amounts will provide for ongoing operating
expenses.

     We believe our cash balance of $545 as of June 30, 2004, plus
projected cash flows and future offerings that we plan to do,
will provide sufficient capital to implement our plan to
place our textbooks throughout the targeted school districts.
Our current monthly operating expense is less than
approximately $3,000, inclusive of audit fees and exclusive
of management's salaries, which are deferred until we begin
selling our books.  In the year ended June 30, 2003, we
received final approval of our textbook from the
superintendent of schools for the Los Angeles County.  Upon
securing the necessary sponsorship we will begin printing the
textbooks.  We have hired an independent sales agent in the
first quarter of FYE 2005.  Management estimates that
operating expenses will increase during FYE 2005 until they
reach the range of $15,000 per month, and remain in that
range per month throughout the remainder of 2005.  This
includes wages and employee expenses, rent and occupancy
expenses, sales and marketing expense, and other general and
administrative expenses.  Executive wages will continue to be
accrued but payment of executive wages will be deferred until
there is sufficient revenues and cash flow.

     A corporate officer has made initial textbook sales,
specifically, Mr. Parks, who has agreed to defer any
commission until the Company can afford to pay him.
Management believes that there is sufficient gross margin in
the sales price of the textbooks at $10 - $15 per book to
cover the costs of publication, sales commissions and
royalties and leave the remainder (approximately 40%) to
cover other operating costs. Should the price of the
textbooks be reduced below an average of $13 per book, the
gross margin for operating expenses would be reduced
accordingly.  Based on our initial results, we expect the
sales campaign for Los Angeles to take between 16 and 24
months by which time we anticipate selling 77,000 textbooks
to cover the entire district, but the selling of any of the
77,000 textbooks is not guaranteed.  We can deliver the books
within 40 days of initiating the publication process.  As our
textbooks are supplemental, we believe they can be provided
as late as January in any school year and still be available
for the second half of that school year.  At $13 per book, if
all 77,000 textbooks are sold, which there is no guarantee,
the sale(s) should generate approximately $1.0 million in
revenue and approximately half that in gross margin.
Operating costs will increase slowly as sales and
corresponding staff requirements materialize.  Costs will be
maintained commensurate with sales.  Although management
anticipates continued success in obtaining corporate
sponsorships, it is not guaranteed.  Therefore, the
aforementioned revenues are speculative and should not be
viewed as a confirmed revenue source.


/17/


  (2)    Our total expenses for the period from July 30, 1999
(inception) to June 30, 2004 were $270,053, of which 100% were
general and administrative.  The following table quantifies the
components that comprise our general and administrative expenses
for the periods ended June 30, 2004, June 30, 2003 and from
inception until June 30, 2004:

 Description               Year       Year      Year        From
                           ended      ended     ended       inception
                           June       June      June 30,    (July 30,
                           30,        30,       2002        1999) to
                           2004       2003                  June 30, 2004

 Legal and                 $34,215   $73,330     $7,543      $115,088
 Professional Fees

 Printing Costs                  -     1,986      2,500         4,486
 (Marketing Materials

 Wages and Salaries         41,946    51,865     12,077       105,888

 Rent Expense                3,456     4,680      3,220        11,356

 Other Miscellaneous         3,751     4,627      1,635        10,013
 Administrative Expenses

 Impairment of Capitalized  15,341         -          -        15,341
 Publishing Costs

 Marketing Expense           5,481         -          -         5,481

 Taxes                         800       800        800         2,400
                          --------  --------    -------      --------
   Total General and      $104,990  $137,288    $27,775      $270,053
   Administrative Expenses

     Our net loss for the year ended June 30, 2004 was $104,990
compared to a net loss of $136,807 for the year ended June 30,
2003.  We believe funds received from our common stock offering
plus our projected cash flows will be adequate to fund our
operations and provide for our working capital needs for at
least the next 12 to 24 months.  As we grow our business and
obtain additional purchase orders for our textbooks, our
revenues should grow on a consistent basis.  By focusing our
efforts on limiting general and administrative expenses as we
increase revenue, we expect to increase our net income on a
consistent basis as well.  Though the typical school year runs
from September through June, we expect revenues to be affected
by seasonal variations on a very limited basis only.  Our
product is a supplemental textbook, which means it can be
introduced at various points in the school year.  Our sales
efforts will continue throughout the year.  If fluctuations in
sales affect cash flow to an extent not manageable through
normal techniques we will adjust staffing levels accordingly.

     Periodically, management reviews the carrying values of its
long-lived assets.  Because there were no sales in 2004,
management believes capitalized publishing costs became impaired
and as a result an impairment loss of $15,341 for the
capitalized publishing costs was recorded at June 30, 2004.

     We had a net decrease in cash during the year ended June
30, 2004 of $302.  Net cash used in operating activities totaled
$40,251 for the year ended June 30, 2004 compared with $68,892
for the previous year.  Net cash investing activities used $0
for the year ended June 30, 2004 compared with $957 used in the
previous year.  This was due exclusively to capitalized
publishing.  Net cash provided by financing activities totaled
$39,949 for the year ended June 30, 2004 compared with $14,046
for the previous year.  This is attributable to generating $100
and $10,000 in 2004 and 2003, respectively from sales of common
stock and net changes in notes payable - related parties.  At
June 30, 2004, the Company's cash, which includes cash reserves
and cash available for investment, was $545.


/18/


     Our consolidated 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 possible
inability of the Company to continue as a going concern.

     As of June 30, 2004 and 2003, a current deferred tax asset
of approximately $108,000 and $66,000 had been recognized for the
temporary differences related to net operating losses carried
forward, respectively. This was an increase of $42,000.  A
valuation allowance of approximately $108,000 and $66,000 has
been recorded to fully offset the deferred tax asset as it is not
more likely than not that the assets will be utilized. The
Federal net operating losses of approximately $269,000 and begin
to expire in 2022 and the state net operating losses of
approximately $269,000 and begin to expire in 2011, unless
previously utilized.


     We may experience significant fluctuations in operating
results in future periods due to a variety of factors, including
but not limited to, the following risk factors.


  Limited Operating History

     We have a limited operating history on which to base
estimates for future performance and face all of the risks
inherent in the educational textbook industry.  These risks
include, but are not limited to, market acceptance and
penetration of our products, our ability to obtain a pool of
qualified personnel, management of the costs of conducting
operations, general economic conditions and factors that may be
beyond our control.  We cannot assure you that we will be
successful in addressing these risks.  Failure to successfully
address these risks could have a material adverse effect on our
operations.

  Need for Additional Financing

     We may need to obtain additional financing in the event that
we  are  unable to realize sufficient revenue or collect accounts
receivable  when we emerge from the development  stage.   We  may
incur  additional  indebtedness from  time  to  time  to  finance
acquisitions, provide for working capital or capital expenditures
or for other purposes.  However, we currently anticipate that our
expected  operating  cash  flow and the  funds  raised  from  our
offering of common stock (as described in Part II, Item 4. Recent
Sale  of Unregistered Securities) will be sufficient to meet  our
operating expenses for at least the next 12 to 24 months.

     Furthermore, our ability to pay future cash dividends on our
Common  Stock,  or  to  satisfy the  redemption  of  future  debt
obligations  that  we may enter into will be primarily  dependent
upon  the  future  financial  and operating  performance  of  our
Company.   Such performance is dependent upon financial, business
and  other general economic factors, many of which are beyond our
control.   If we are unable to generate sufficient cash  flow  to
meet our future debt service obligations or provide adequate long-
term  liquidity, we will have to pursue one or more alternatives,
such  as  reducing or delaying capital expenditures,  refinancing
debt,  selling assets or operations, or raising additional equity
capital.  There can be no assurance that such alternatives  could
be  accomplished on satisfactory terms, if at all, or in a timely
manner.

     Critical Accounting Standards


/19/


     Stock-Based Compensation In October 1995, the Financial
Accounting Standards Board (FASB) issued SFAS No. 123,
"Accounting for Stock-Based Compensation." We adopted SFAS No.
123 in 1999. We have elected to measure compensation expense for
our stock-based employee compensation plans using the intrinsic
value method prescribed by APB Opinion 25, "Accounting for Stock
Issued to Employees." We have valued our stock, stock options,
and warrants issued to non-employees at fair value in accordance
with the accounting prescribed in SFAS No. 123, which states that
all transactions in which goods or services are received for the
issuance of equity instruments shall be accounted for based on
the fair value of the consideration received or the fair value of
the equity instruments issued, whichever is more reliably
measurable. Impairment or Disposal of Long-Lived Assets In August
2001 the FASB issued Statement No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets (SFAS 144). SFAS 144
clarifies the accounting for the impairment of long- lived assets
and for long-lived assets to be disposed of, including the
disposal of business segments and major lines of business. We
adopted the new standard on January 1, 2002; the adoption did not
have an effect on our consolidated financial statements. Revenue
Recognition We expect our primary source of revenue to come from
the sales of our textbooks to sponsoring organizations. Revenue
will be recognized according to GAAP, which generally records
revenue upon publication and/or delivery of the books.

     Recent Accounting Pronouncements

     In  May  2003  the  FASB issued  SFAS  No.  150, "Accounting  for
Certain Financial  Instruments with  Characteristics  of both
Liabilities  and Equity."  SFAS No. 150 establishes standards for
how  an  issuer classifies and measures  certain financial
instruments with  characteristics  of both liabilities and
equity. It requires that an issuer  classify a financial
instrument that  is within its scope as a liability (or an asset
in some  circumstances).  SFAS No. 150 is effective for
financial  instruments  entered  into   or modified  after May
31, 2003, and  otherwise  is effective at the beginning of the
first  interim period  beginning  after  December  15,  2003.
The adoption  of  this  Statement  is  not  expected to  have  a
material effect  on  the  financial statements.


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/20/


ITEM 7.  FINANCIAL STATEMENTS.



                        TABLE OF CONTENTS


                                                           PAGE

Independent Auditor's Report                                22

Consolidated Balance Sheets                                 23

Consolidated Statements of Operations                       24

Consolidated Statement of Cash Flows                      25-26

Consolidated Statement of Stockholders' Deficit           27-30

Notes to Consolidated Financial Statements                31-37


/21/


Independent Registered Auditors' Report


Board of Directors and Stockholders
Heritage Scholastic Corporation
(a development stage company)
Encinitas, California


We  have audited the accompanying consolidated balance sheets  of
Heritage Scholastic Corporation (a development stage company)  as
of  June  30,  2004  and  2003,   and  the  related consolidated
statements of operations, stockholders' deficit, and  cash flows
for each of the years ended  June 30, 2004, 2003  and  2002 and
for the period  from  inception (July 30, 1999) to June 30, 2004.
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.

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

In  our  opinion, the consolidated financial statements referred to
above  present  fairly, in all material respects,   the financial
position   of   Heritage  Scholastic   Corporation   (a development
stage company)  as of June 30, 2004 and 2003, and the results of
its  operations and  cash  flows for  each  of  the years ended
June 30,  2004, 2003 and 2002  and for  the period  from  inception
(July 30, 1999)  to   June  30, 2004,    in   conformity  with
accounting  principles generally accepted in the United States of America.

The  accompanying  consolidated financial  statements  have been
prepared  assuming  that the Company will  continue  as  a going
concern.  As  discussed  in Notes 1 and  2  to  the consolidated
financial  statements, the Company is dependent upon the raising
of  additional equity to provide the working capital necessary to
emerge  from the development stage, has negative working capital,
and  continued  losses. These conditions raise substantial doubt
about  its  ability to continue as a going concern. Management's
plan  regarding this matter is also described in Notes 1 and  2.
The   consolidated  financial  statements  do  not  include any
adjustments   that  might  result  from  the  outcome   of this
uncertainty.

/s/ Nation Smith Hermes Diamond
  San Diego, CA
September 24, 2004


/22/


                                               Heritage Scholastic Corporation
                                                 (a Development Stage Company)
                                                   Consolidated Balance Sheets

==============================================================================
June 30,                                                 2004            2003
------------------------------------------------------------------------------

Assets

Current Assets
 Cash (Note 1)                                        $     545     $     847
 Accounts receivable                                        600         3,300
 Inventory                                                    0         5,481
 Prepaid expenses                                           100         4,000
------------------------------------------------------------------------------

Total current assets                                      1,245        13,628

Capitalized Publishing Costs (Note 1)                         0        15,341
------------------------------------------------------------------------------

                                                      $   1,245     $  28,969
==============================================================================

Liabilities and Stockholders'Deficit

Current Liabilities
 Accounts payable and accrued expenses                $  14,064     $  12,625
 Wages payable                                           71,314        31,752
 Income taxes payable (Note 4)                            1,600         1,600
 Deferred revenue (Note 1)                               12,000        12,000
 Notes payable-related parties (Note 3)                  47,150        14,269
------------------------------------------------------------------------------

Total liabilities                                       146,128        72,246

Commitments and Contingencies (Note 2, 8 and 9)

Stockholders'Deficit
 Preferred stock; $0.001 par value, 20,000,000 shares
  authorized and no shares issued and outstanding             -             -
 Common stock; $0.001 par value, 100,000,000 shares
  authorized and 7,919,875 and 7,918,875 shares
  issued and outstanding                                  7,920         7,919
 Additional paid-in capital                             116,769       113,386
 Deficit accumulated during the development stage      (269,572)     (164,582)
------------------------------------------------------------------------------

Total stockholders'deficit                             (144,883)      (43,277)
------------------------------------------------------------------------------

                                                      $   1,245     $  28,969
==============================================================================
The accompanying notes are an integral part of these consolidated
financial statements.


/23/


                                               Heritage Scholastic Corporation
                                                 (a Development Stage Company)
                                         Consolidated Statements of Operations

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

                                                                  Period from
                                                              Inception (July
                                                                 30, 1999) to
June 30,                   2004        2003        2002         June 30, 2004
------------------------------------------------------------------------------

Revenues               $      -    $  8,400    $      -           $  8,400

Cost of Sales                 -       7,919           -              7,919
------------------------------------------------------------------------------

Gross Profit                  -         481           -                481

General and
Administrative
Expenses
  Impairment of
   Capitalized
   Publishing Costs      15,341           -           -             15,341
  Marketing Expense       5,481           -           -              5,481
  Other G & A            84,168     137,288      27,775            249,231

Total General and
Administrative
Expenses                104,990     137,288      27,775            270,053

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

Net Loss               (104,990)   (136,807)    (27,775)          (269,572)
------------------------------------------------------------------------------
Loss Per Share of
Common Stock              (0.01)      (0.02)      (0.00)
------------------------------------------------------------------------------
Weighted Average
Shares Outstanding    7,919,375    7,718,190   6,696,827

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

There was no activity for the years ended June 30, 2001 and 2000.

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


/24/


                                               Heritage Scholastic Corporation
                                                 (a Development Stage Company)

                                         Consolidated Statements of Cash Flows

==============================================================================
                                                             And  Period from
                                                              Inception (July
                                                                 30, 1999) to
June 30,                   2004       2003       2002           June 30, 2004
------------------------------------------------------------------------------
Cash Flows From
Operating Activities
Net loss                (104,990)   (136,807)  (27,775)           (269,572)
Adjustments to reconcile
 net loss to net cash
 used in operating
 activities:
  Non-cash stock based
   compensation expense    3,284      30,000     5,700              38,984
  Impairment of Capital-
   ized Publishing Costs  15,341           -         -              15,341

Change in operating assets
 and liabilities:
 Accounts receivable       2,700      (3,300)        -                (600)
   Inventory               5,481      (5,481)        -                   0
   Prepaid expenses        3,900      (4,000)        -                (100)
 Accounts payable and
  accrued expenses        (5,529)     13,320     6,273              14,064
 Wages and related
  taxes payable           39,562      25,376     6,376              71,314
   Income taxes payable        -           -     1,600               1,600
   Deferred revenue            -      12,000         -              12,000
------------------------------------------------------------------------------
Net cash used in
operating activities     (40,251)    (68,892)   (7,826)           (116,969)
------------------------------------------------------------------------------
Cash Flows From
Investing Activities
 Decrease (increase)
 in capitalized
 publishing costs              -        (957)  (14,384)            (15,341)
------------------------------------------------------------------------------

Cash Flows From
Financing Activities
 Net proceeds from
 issuance of
 common stock                100      10,000    75,605              85,705

Net change in
 notes payable
   related parties -      39,849       4,046     3,255              47,150

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


/25/


Net cash provided by
financing activities      39,949      14,046    78,860             132,855
------------------------------------------------------------------------------
Net increase
(decrease)in cash           (302)    (55,803)   56,650                 545
------------------------------------------------------------------------------
Cash at
Beginning of Period          847      56,650         -                   -
------------------------------------------------------------------------------

Cash at End of Period        545         847    56,650                 545
==============================================================================

There was no activity for the year ended June 30, 2001 and 2000.

Noncash Investing and Financing Activities:

During the year ended June 30, 2001, the Company issued 6,100,000
common shares valued at $7,300 in exchange for notes receivable.
The amount was collected in 2002.

During the year ended June 30, 2002, the Company issued 280,000
common shares valued at $28,000 in exchange for services
performed in a common stock offering.

During the year ended June 30, 2004, 2003 and 2002, the Company
recorded non - cash stock based compensation expense of $3,284, $10,000
and $5,700, respectively, for stock options issued to non - employees.

On March 30, 2003, the Company issued 200,000 shares of common
stock for services provided with a fair value of $20,000.
==============================================================================
The accompanying notes are an integral part of these consolidated
financial statements.


/26/


                                               Heritage Scholastic Corporation
                                                 (a Development Stage Company)

                                           Statements of Stockholders' Deficit

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

                  Common Stock   Additional  Shareholder
                 --------------   Paid-in        Notes    Accumulated
                 Shares  Amount   Capital     Receivable    Deficit    Total
------------------------------------------------------------------------------

Balance at July       -  $    -   $      -   $        -   $       -   $      -
30, 1999 and
June 30, 2000

Common stock  5,500,000   5,500          -       (5,500)          -          -
issued for
shareholder
notes receivable
at $0.001 per
share on
July 1, 2000
(Note 6)

Common stock    600,000     600      1,200       (1,800)          -          -
issued for
shareholder
notes receivable
at $0.003 per
share on
September 29,
2000 (Note 6)

No activity           -       -          -            -           -          -
------------------------------------------------------------------------------

Balance at    6,100,000   6,100      1,200       (7,300)          -          -
June 30, 2001

Common stock    680,625     681     26,544            -           -     27,225
issued for
cash at $0.04
per share
on September
14, 2001 (Note 6)

Common stock    558,250     558     55,267            -           -     55,825
issued for
cash of $0.10
per share
under the PPM
on June 30,
2002 (Note 6)


/27/


Common stock    280,000     280     27,720            -           -     28,000
issued for
services at
$0.10 per share
on June 30,
2002 (Note 6)

Direct costs of       -       -    (42,745)           -           -    (42,745)
stock offering at
$0.10 per share
on June 30,
2002 (Note 6)

Fair value of         -       -      5,700            -           -      5,700
stock options
issued to non-
employees on
July 1, 2001
(Note 7)

Collection of         -       -          -        7,300           -      7,300
shareholder
notes receivable

Net loss July 1,
2001 to June 30,
2002                  -       -          -            -     (27,775)   (27,775)
------------------------------------------------------------------------------

Balance at    7,618,875  $7,619   $ 73,686   $        -   $ (27,775)  $ 53,530
June 30, 2002

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


/28/


                                               Heritage Scholastic Corporation
                                                 (a Development Stage Company)

                                   Statements of Stockholders' Deficit, Cont'd

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

                  Common Stock   Additional  Shareholder
                 --------------   Paid-in        Notes    Accumulated
                 Shares  Amount   Capital     Receivable    Deficit    Total
------------------------------------------------------------------------------

Common stock     50,000      50      4,950            -           -      5,000
issued for
cash at $0.10 per
share on
November 27, 2002
(Note 6)

Common stock     50,000      50      4,950            -           -      5,000
issued for
cash at $0.10 per
share on
February 8, 2003
(Note 6)

Common stock    200,000     200     19,800            -           -     20,000
issued for
services at $0.10
per share on
March 30, 2003

Fair value of         -       -     10,000            -           -     10,000
stock options
issued to non -
employees
on July 1, 2001

Net loss July 1,
2002 to June 30,
2003                  -       -          -            -    (136,807)  (136,807)
------------------------------------------------------------------------------

Balance at    7,918,875  $7,919  $ 113,386   $        -  $ (164,582) $ (43,277)
June 30, 2003

Common stock      1,000       1         99            -           -        100
issued for
cash at $0.10 per
share on
December 31, 2003

Fair value of         -       -      3,284            -           -      3,284
stock options
issued to non -
employees
on July 1, 2001


/29/


Net loss July 1,
2003 to June 30,
2004                  -       -          -            -    (104,990)  (104,990)
------------------------------------------------------------------------------

Balance at    7,919,875  $7,920  $ 116,769   $        -  $ (269,572) $(144,883)
June 30, 2004
===============================================================================


/30/


                                     Heritage Scholastic Corporation
                                       (a development stage company)


                          Notes to Consolidated Financial Statements

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

1. Summary of      A summary of the Company's significant accounting
   Significant     policies  consistently applied in the preparation
   Accounting      of   the   accompanying  consolidated financial
   Policies        statement follows.

   Organization    Heritage  Scholastic Corporation  ("the Company")
                   was  incorporated in the state of Nevada on  July
                   30,  1999 with the purpose of developing  history
                   textbooks   for  sale  to  students in   grades
                   kindergarten  through high school in the  United
                   States. Heritage Media Corporation's ("HMC") sole
                   shareholders  are Charles and  Lori Parks. They are
                   also sole owners of Parks Family LLC (PFLLC) and
                   Imprint Publications LLC (IPLLC). The Parks' are
                   also shareholders in the Company.  The Company also
                   shares   officers, directors, and other various
                   resources with  HMC (see Note 7).

                   These  consolidated financial statements include
                   the  accounts  of  its wholly  owned subsidiary,
                   Books  for  Kids,  Inc.  (a Nevada Corporation).
                   Books for Kids, Inc. was incorporated on February
                   21,  2003. All material intercompany transactions
                   have been eliminated in consolidation

   Going           The     accompanying    consolidated financial
   concern         statements   have  been  prepared  assuming the
                   Company will continue as a going concern.  Due to
                   the  Company's  status as a  developmental stage
                   company  (see  Note 2), negative working capital
                   and  continued losses, there is substantial doubt
                   about  the  Company's ability to  continue  as a
                   going  concern.  During the year ended  June 30,
                   2004,  and  the period from inception  (July 30,
                   1999  to June 30, 2004), the Company raised gross
                   proceeds  net  of  deferred  offering  costs of
                   approximately $86,000.  Management believes these
                   proceeds plus future offerings the Company plans
                   to  do,  are  adequate  to  cover  the Company's
                   operating expenses for the next 12 months.  As is
                   typical  in  this  industry,  the  Company will
                   receive an   upfront   deposit on   each sale of
                   textbooks, which would cover the majority of the
                   costs  to publish the books. Therefore the funds
                   raised from the stock offerings will be used for
                   operating expenses.

                   If  cash  flow from future product sales  is not
                   sufficient   to  fund  operations,  the Company
                   intends  to  obtain additional  debt  and equity
                   financing.     There  is  no   assurance that
                   additional     debt     and    equity financing
                   needed   to   fund operations will be consummated
                   or  obtained  in sufficient amounts necessary to
                   meet the Company's needs.

                   The      accompanying   consolidated 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 possible inability of
                   the Company to continue as a going concern.


/31/


                                     Heritage Scholastic Corporation
                                       (a development stage company)


                          Notes to Consolidated Financial Statements

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

   Use of           The  preparation  of the consolidated financial
   estimates        statements in conformity with generally accepted
                    accounting  principles  requires  management to
                    make   estimates  and  assumptions  that affect
                    certain  reported  amounts  and disclosures.
                    Accordingly,  actual results could  differ from
                    those estimates.

   Cash             The    Company   considers   all   highly-liquid
                    investments  with original maturities  of three
                    months or less to be cash equivalents.

   Income           Deferred    income    taxes are  recognized for
   taxes            the  tax  consequences    in future  periods of
                    differences   between   the tax  basis of assets
                    and      liabilities   and   their financial
                    reporting amounts at each period end based on
                    enacted   tax laws   and   statutory tax rates
                    applicable    to   the   periods     in which
                    the  differences are expected to affect taxable
                    income.

                    Valuation  allowances are    established when
                    necessary   to reduce deferred tax assets to the
                    amount expected to be realized.

   Capitalized      Writing  and  photography costs were incurred
   publishing       and      capitalized   in     connection with
   costs            developing   the   textbook   that the Company
                    intends    to   sell   once operations commence.
                    These   costs   will be   amortized on a   per
                    textbook basis based on the estimated number  of
                    textbooks  to be sold.  Management will  perform
                    impairment    tests on   these costs whenever
                    events    or      changes     in circumstances
                    indicate    that   its   carrying amount    has
                    been   impaired   in accordance with SFAS 144.
                    The relevant   factors   management will use  to
                    determine  whether  the carrying value  of  the
                    assets can be recovered   will   be based on the
                    estimated  undiscounted net  cash flows  on  an
                    individual book title basis. The asset  will  be
                    considered    impaired    if    the estimated
                    undiscounted  net  cash flows on  an individual
                    book  title  basis  is less  than the  carrying
                    amount  of  the  capitalized   costs associated
                    with   the   same   individual book title.    An
                    impairment  loss  will  be recognized  as   the
                    difference    in the   carrying amount  and  the
                    fair value of the capitalized costs.

                    Periodically,  management  reviews   the carrying
                    values  of   its   long-lived assets.  Because
                    there were no sales  in 2004,  management  believes
                    capitalized publishing costs became impaired and  as
                    a result an impairment loss of $15,341   for   the
                    capitalized publishing  costs was recorded  at  June
                    30, 2004.


/32/


                                     Heritage Scholastic Corporation
                                       (a development stage company)


                          Notes to Consolidated Financial Statements

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

   Revenue          Revenue  will  be  recognized  upon publication
   recognition      and/or  delivery of the books. Certain products
                    may  be  sold  with a right of  return  and the
                    Company  will provide an allowance for estimated
                    returns  in the same period the related sale is
                    made.  Revenue  will not be recorded  until the
                    Company can estimate the rate of returns of the
                    products.  The majority of the products that the
                    Company expects to sell do not have the right of
                    return.

                    Advertising  revenue  on the  Company's website
                    would be recognized ratably over the period the
                    advertisement is displayed on the site.

                    Deferred  revenue is recorded when  payment has
                    been  received,  but the product  has  not been
                    shipped or service performed.

   Net loss per     Net    loss   per   common   share   has been
   common share     computed on the   basis of the weighted average
                    number of shares outstanding,   according to the
                    rules  of  SFAS No. 128,  "Earnings per Share."
                    Diluted  net    loss   per    share   has not
                    been  presented, as the computation would result
                    in anti-dilution.

   Stock-based      In  October  1995, the FASB issued SFAS No.123,
   compensation     "Accounting for Stock-Based Compensation." The
                    Company  adopted  SFAS No.  123  in  1999. The
                    Company  has  elected   to measure compensation
                    expense    for    its    stock-based employee
                    compensation  plans  using the  intrinsic value
                    method prescribed by APB Opinion 25, "Accounting
                    for Stock Issued to Employees."  Generally stock
                    options  and their equivalents have  a dilutive
                    effect  on  earnings per share. As of  June 30,
                    2004 and 2003, there were 1,475,000 and 625,000
                    options, respectively, that were not included as
                    the calculation of loss per share as their effect
                    would have been anti-dilutive.

   Common  stock,   The     Company  has  valued   its  stock, stock
   stock  options,  options, and   warrants  issued  to non-employees
   and  warrants    at fair value in  accordance  with the accounting
   to  non-         prescribed  in  SFAS    No.   123,   which states
   employees        that all transactions in which  goods or services
                    are  received   for   the    issuance  of  equity
                    instruments  shallbe   accounted for based on the
                    fair value of the consideration received  or  the
                    fair value of the equity instruments issued,
                    whichever  is  more   reliably measurable.

  Plan              The  Company maintains a Stock Option Plan  ("the
  description       Plan")  that  has a Discretionary  Option Grant
                    Program  and a Stock Issuance Program. Persons
                    eligible to participate in the Programs are non-
                    employee  members  of  a  related  entity, HMC.
                    There  are 1,500,000 common shares reserved for
                    issuance under the Plan.

   Stock            The    Plan Administrator determines   the terms
   options          of   the   stock  option  awards.   The options
   issued for       granted  have  a    contractual  life  of seven
   non-             years, vest over four years, and are exercisable
   employee         when vested.  The options vest as follows:
   services
                    ------------------------------------------------
                     December 31, 2002                     40%
                     July 1, 2004                          50%
                     June 30, 2005                         10%
                    ------------------------------------------------

                    In  July  2001 the Company granted non-qualified
                    stock options to various employees of HMC. The
                    Company recorded a non-cash compensation expense
                    of  $3,284, $10,000, and $5,700 for the years ended
                    June 30, 2004, 2003, and 2002, respectively, related
                    to these non-employee options.

                    The  fair  value of each option is estimated on
                    the date of grant using the minimum value method
                    with the following weighted-average assumptions:
                    a risk-free interest rate of 4.75%, a volatility
                    of zero, and an expected life of 5 years.


/33/


                                     Heritage Scholastic Corporation
                                       (a development stage company)


                          Notes to Consolidated Financial Statements

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

   Stock            The Company values its stock, stock options, and
   options          warrants  issued to non-employees at fair value
   issued for       in  accordance with the accounting prescribed in
   non-             SFAS No. 123, which states that all transactions
   employee         in  which goods or services are received for the
   services,        issuance   of   equity  instruments   shall be
   cont'd           accounted  for based on the fair  value  of the
                    consideration received or the fair value of the
                    equity  instruments issued,  whichever  is more
                    reliably measured (see Note 1).

                    A summary of non-qualified stock option activity
                    is as follows:


                                                            Weighted
                                                             Average
                                              Number of     Exercise
                                                 Shares        Price
         -----------------------------------------------------------
         Options outstanding at July 30, 1999         -   $        -
         Granted July 1, 2001                 1,070,000   $     0.10
         Exercised                                    -   $        -
         Forfeited                             (210,000)  $     0.10
         -----------------------------------------------------------
         Options outstanding at June 30, 2002   860,000   $     0.10
         -----------------------------------------------------------
         Granted July 1, 2002                         -   $     0.10
         Exercised                                    -   $        -
         Forfeited                             (235,000)  $     0.10
         -----------------------------------------------------------
         Options outstanding at June 30, 2003   625,000   $     0.10
         -----------------------------------------------------------
         Granted January 1, 2004                850,000   $     0.10
         Exercised                                    -   $        -
         Forfeited                                    -   $     0.10
         -----------------------------------------------------------
         Options outstanding at June 30, 2004 1,475,000   $     0.10
         -----------------------------------------------------------


                    Stock  options that were exercisable as of June
                    30,   2004  and  2003  were 250,000.
                    The contractual remaining life  of
                    the option pool is 5 years.  There have been no
                    options grants to employees.

   Recent           In  May  2003  the  FASB issued  SFAS  No.   150,
   Accounting       "Accounting  for  Certain   Financial  Instruments
   Pronouncements   with  Characteristics  of both  Liabilities and
                    Equity."  SFAS No. 150 establishes standards for
                    how  an  issuer classifies and measures certain
                    financial  instruments with  characteristics of
                    both liabilities and equity. It requires that an
                    issuer  classify a financial instrument that is
                    within its scope as a liability (or an asset in
                    some  circumstances).  SFAS No. 150 is effective
                    for   financial  instruments  entered  into or
                    modified  after May 31, 2003, and  otherwise is
                    effective at the beginning of the first interim
                    period  beginning  after  December  15, 2003. The
                    adoption  of  this  Statement  is  not expected
                    to  have  a  material effect  on  the financial
                    statements.


/34/

                                     Heritage Scholastic Corporation
                                       (a development stage company)


                          Notes to Consolidated Financial Statements

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


2. Development      The  Company has not had significant revenue and
   Stage            activities since the Company's inception have
   Activities       been    devoted  primarily to raising capital
                    and    creating a textbook.   The Company has
                    begun  to  focus  on developing the  market for
                    this  textbook.  As a result, the Company  is a
                    development stage enterprise as defined by SFAS 7.

3. Note             The  related party note payable, dated June 30,
   Payable          2003, consisted of demand of a demand note with
                    HMC  bearing interest at 6%, which resulted from
                    graphic  services provided to the Company. The
                    note was retired in 2004.

                    The  notes  payable- related parties  at
                    June  30, 2004 are non-interest  bearing
                    short term advances by the officers  and
                    directors of the company, Charles Parks,
                    Lori  Parks  and  Randall  Peterson  and
                    their related entities.

4. Income Taxes
                    As  of June 30, 2004 and 2003, a  current
                    deferred   tax   asset  of  approximately
                    $108,000  and $66,000 had been recognized
                    for   the  temporary differences  related
                    to   net   operating   losses     carried
                    forward,  respectively.   This   was   an
                    increase   of   $42,000.    A   valuation
                    allowance  of approximately $100,000  and
                    $66,000   has  been  recorded  to   fully
                    offset  the deferred tax asset as  it  is
                    not   more  likely  than  not  that   the
                    assets  will  be utilized.   The  Federal
                    net   operating  losses of  approximately
                    $269,000   begin to expire in  2022   and
                    the  state   net  operating   losses   of
                    approximately  $269,000  which  begin  to
                    expire    in   2011,   unless  previously
                    utilized.

                    California law imposes a franchise tax  of 1.5%
                    of taxable income on companies doing business in
                    the  state  with a certain minimum  amounts per
                    year.    The  income  taxes  payable  of $1,600
                    relates to California minimum taxes.

5. Preferred        The  Company has 20,000,000 shares of authorized
   Stock            preferred  stock.   No  shares  were  issued or
                    outstanding as of June 30, 2004.

6. Common           On July 1, 2000 the   Company   issued 5,500,000
   Stock            shares   of   common  stock  to  the Company's
                    founders  at  $0.001    per  share  for  a note
                    receivable  that was repaid in  the  year ended
                    June 30, 2002.

                    On  September  29,  2000  the    Company issued
                    600,000  shares of common stock to a key officer
                    of the   Company   at $0.003   per   share for
                    a  note  receivable that was repaid in the year
                    ended June 30, 2002.

                    On  September  14,  2001    the  Company issued
                    680,625  shares  of   common  stock  to various
                    investors for cash of $0.04 per share.

                    On  June  30, 2002 the   Company issued 558,250
                    shares  of  common  stock in a Nevada-registered
                    offering  filed under   Rule 504 of Regulation
                    D of the   Securities   Act of   1933 to various
                    investors for cash of $0.10 per share.


/35/


                                     Heritage Scholastic Corporation
                                       (a development stage company)


                          Notes to Consolidated Financial Statements

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

6. Common           Related  to the shares issued on June  30, 2002
   Stock,           the  Company issued 275,000 shares  to  a stock
   Cont'd           offering consulting firm and 5,000 shares to an
                    individual  for  work  performed  on  the stock
                    offering. These shares were valued at the stock-
                    offering  price of $0.10 per share, or $28,000.
                    The shares issued to the consulting firm were in
                    addition  to  cash fees under an  agreement for
                    various  stock offering services (see  Note 9).
                    During  2002, the Company incurred  a  total of
                    approximately $43,000 in direct costs related to
                    above  common stock offering, inclusive  of the
                    shares  issued  for services issued  at  a fair
                    value of $28,000.

                    On  November 27, 2002, the Company issued 50,000
                    shares  of common stock to an investor for cash
                    of $0.10 per share.

                    On  February 8, 2003, the Company issued 50,000
                    shares  of common stock to an investor for cash
                    of $0.10 per share.

                    On  Match  30,  2003 the Company issued 200,000
                    shares  of  common stock for services performed
                    with a fair value of $20,000.

                    On  December 31, 2003, the Company issued  1,000
                    shares  of common stock to an investor for cash
                    of $0.10 per share.

7. Related          Since  its  inception, the Company has received
   Party            various   services  related  to   day   to day
   Transactions     operations from a related entity, HMC.  The note
                    payable  to HMC represents the balance  due for
                    these  services and is due on demand  (see Note
                    3).

                    In  January 2002 the Company signed a  sub-lease
                    agreement with HMC that expired in December 2003
                    whereby  the Company paid HMC $520  per
                    month  for  the use of space and general office
                    resources.  The lease was revised in October of
                    2002 into a sublease between the Company and the
                    Park's Family LLC.  The Company recorded expense
                    of  $4,680  and $3,120 on the lease  during the
                    year ended June 30, 2004 and 2003, respectively.
                    The lease was terminated early by the mutual
                    consent of both parties as of December 31, 2003.



/36/


                                     Heritage Scholastic Corporation
                                       (a development stage company)


                          Notes to Consolidated Financial Statements

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

7. Related          In  March  2002 the Company signed  a  five-year
   Party            agreement with HMC whereby HMC will provide the
   Transactions,    Company  with printing and binding services for
   Cont'd           the  production  of  the Company's textbooks.
                    The  Company has agreed to publish no fewer than
                    15  books  during the 5 year period as  well as
                    give  HMC the right of first refusal during the
                    same  period.  In return, HMC    has  agreed to
                    design  and publish the Company's   books  at a
                    the  lower of a discount   of 20% off HMC prices
                    or  90%  of the average of 3 local bids obtained
                    by  the Company. The agreement can be terminated
                    by  either  party for cause. The  agreement was
                    terminated by the Company in 2003 for cause.

8. Commitments
   and
   Contingencies

   Author           The  Company has agreed to pay   the  author of
   royalties        the  textbook a royalty of 4.5% to 5% of the net
                    book  sales, depending on the number of editions
                    sold.

   Employment       The  Company has employment agreements with key
   agreements       employees that specify terms of employment.


/37/


ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURES

     We have had no disagreements with our independent
accountants.

ITEM 8A. CONTROLS AND PROCEDURES

     Quarterly evaluation of the Company's Disclosure Controls and
Internal Controls.

     Within the 90 days prior to the date of this Annual Report
on Form 10-KSB, the Company evaluated the effectiveness of the
design and operation of its "disclosure controls and procedures"
(Disclosure Controls), and its "internal controls and procedures
for financial reporting" (Internal Controls).  This evaluation
(the Controls Evaluation) was done under the supervision and with
the participation of management, including our Chief Executive
Officer (CEO) and Chief Financial Officer (CFO).  Rules adopted
by the SEC require that in this section of the Annual Report we
present the conclusions of the CEO and the CFO about the
effectiveness of our Disclosure Controls and Internal Controls
based on and as of the date of the Controls Evaluation.

CEO and CFO Certifications.

     Appearing immediately following the Signatures section of
this Annual Report there is form of "Certification" of the CEO
and the CFO.  This Certification is required in accord with
Section 302 of the Sarbanes-Oxley Act of 2002 (the Section 302
Certification).  This section of the Annual Report, which you are
currently reading is the information concerning the Controls
Evaluation referred to in the Section 302 Certifications and this
information should be read in conjunction with the Section 302
Certifications for a more complete understanding of the topics
presented (see Exhibit 31).

Disclosure Controls and Internal Controls.

     Disclosure Controls are procedures that are designed with
the objective of ensuring that information required to be
disclosed in our reports filed under the Securities Exchange Act
of 1934 (Exchange Act), such as this Annual Report, is recorded,
processed, summarized and reported within the time periods
specified in the Securities and Exchange Commission's (SEC) rules
and forms.  Disclosure Controls are also designed with the
objective of ensuring that such information is accumulated and
communicated to our management, including the CEO and CFO, as
appropriate to allow timely decisions regarding required
disclosure.

     Internal Controls are procedures that are designed with the
objective of providing reasonable assurance that (1) our
transactions are properly authorized; (2) our assets are
safeguarded against unauthorized or improper use; and (3) our
transactions are properly recorded and reported, all to permit
the preparation of our financial statements in conformity with
generally accepted accounting principles.

Limitations on the Effectiveness of Controls.

     The Company's management, including the CEO and CFO, does
not expect that our Disclosure Controls or our Internal Controls
will prevent all error and all fraud.  A control system, no
matter how well conceived and operated, can provide only
reasonable, not absolute, assurance that the objectives of the
control system are met.  Further, the design of a control system
must reflect the fact that there are resource constraints, and
the benefits of controls must be considered relative to their
costs.  Because of the inherent limitations in all control
systems, no evaluation of controls can provide absolute assurance
that all control issues and instances of fraud, if any, within
the Company have been detected.  These inherent limitations
include the realities that judgments in decision-making can be
faulty, and that breakdowns can occur because of simple error or
mistake.


/38/


     Additionally, controls can be circumvented by the individual
acts of some persons, by collusion of two or more people, or by
management override of the control.  The design of any system of
controls also is based in part upon certain assumptions about the
likelihood of future events, and there can be no assurance that
any design will succeed in achieving its stated goals under all
potential future conditions; over time, control may become
inadequate because of changes in conditions, or the degree of
compliance with the policies or procedures may deteriorate.
Because of the inherent limitations in a cost-effective control
system, misstatements due to error or fraud may occur and not be
detected.

Scope of the Controls Evaluation.

     The CEO/CFO evaluation of our Disclosure Controls and our
Internal Controls included a review of the controls' objectives
and design, the controls' implementation by the Company and the
effect of the controls on the information generated for use in
this Annual Report.  In the course of the Controls Evaluation, we
sought to identify data errors, control problems or acts of fraud
and to confirm that appropriate corrective action, including
process improvements, were being undertaken.  This type of
evaluation will be done on a quarterly basis so that the
conclusions concerning controls effectiveness can be reported in
our Quarterly Reports on Form 10-QSB and Annual Report on Form 10-
KSB.

     Our Internal Controls are also evaluated on an ongoing basis
by other personnel in our organization and by our independent
auditors in connection with their audit and review activities.
The overall goals of these various evaluation activities are to
monitor our Disclosure Controls and our Internal Controls and to
make modifications as necessary; our intent in this regard is
that the Disclosure Controls and the Internal Controls will be
maintained as dynamic systems that change (including with
improvements and corrections) as conditions warrant.

     Among other matters, we sought in our evaluation to
determine whether there were any "significant deficiencies" or
"material weaknesses" in the Company's Internal Controls, or
whether the Company had identified any acts of fraud involving
personnel who have a significant role in the Company's Internal
Controls.

     This information was important both for the Controls
Evaluation generally and because items 5 and 6 in the Section 302
Certifications of the CEO and CFO require that the CEO and CFO
disclose that information to our Board's Audit Committee (or
persons performing the equivalent functions) and to our
independent auditors and to report on related matters in this
section of the Annual Report.  In the professional auditing
literature, "significant deficiencies" are referred to as
"reportable conditions"; these are control issues that could have
a significant adverse effect on the ability to record, process,
summarize and report financial data in the financial statements.

     A "material weakness" is defined in the auditing literature
as a particularly serious reportable condition where the internal
control does not reduce to a relatively low level the risk that
misstatements caused by error or fraud may occur in amounts that
would be material in relation to the financial statements and not
be detected within a timely period by employees in the normal
course of performing their assigned functions.  We also sought to
deal with other controls matters in the Controls Evaluation, and
in each case if a problem was identified, we considered what
revision, improvement and/or correction to make in accord with
our on-going procedures.  In accord with SEC requirements, the
CEO and CFO note that, since the date of the Controls Evaluation
to the date of this Annual Report, there have been no significant
changes in Internal Controls or in other factors that could
significantly affect Internal Controls, including any corrective
actions with regard to significant deficiencies and material
weaknesses.


/39/


Conclusions.

     Based upon the Controls Evaluation, our CEO and CFO have
concluded that, subject to the limitations noted above, our
Disclosure Controls are effective to ensure that material
information relating to the Company and its consolidated
subsidiaries is made known to management, including the CEO and
CFO, particularly during the period when our periodic reports are
being prepared, and that our Internal Controls are effective to
provide reasonable assurance that our financial statements are
fairly presented in conformity with generally accepted accounting
principles.



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/40/


                            PART III


ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.

A.   Directors and Executive Officers

     The following table sets forth certain information with
respect to each of our executive officers or directors.


      Name            Age            Position                    Term
    --------         -----         ------------               -----------

Charles E. Parks       45   President, CEO and Director    Since July 1999

Lori M. Parks          37    Vice President, Secretary,    Since July 1999
                                  and Director

Randall L. Peterson    53   CFO, Treasurer and Director    Since July 1999


B.   Work Experience

     Charles E. Parks, President, CEO, Publisher and Director -
has been involved in the photographic, print and publishing
business for more than 20 years.  He has been involved in senior
executive level management throughout his business career.  While
working as a vice president for a local publisher, Charles
relocated to San Diego from Austin, Texas, in 1991.  He and his
wife, Lori Parks, founded Heritage Media Corporation in 1992.

     Lori M. Parks, Executive Vice-President, Secretary and
Editor in Chief - for Heritage Scholastic Corp., has a strong
journalism/editing background.  After receiving her bachelor's
degree in Journalism from the University of Texas at Austin, she
relocated to San Diego where she was trained in marketing and
public relations at the San Diego Museum of Art.  With her
husband, Charles, Lori co-founded Heritage Media Corporation in
1992.

     Randall L. Peterson, Chief Financial Officer and Treasurer -
has over 21 years' experience in accounting, finance and
financial management in the U.S. and abroad.  He is a CPA with
Big Six experience. (Deloitte and Touche, formerly Touche Ross).
In addition, he has over seven years experience in operations and
sales management.  He has managed subsidiaries in Germany,
France, Italy, Australia, Canada and the U.S.  In 1984, he
directed and coordinated a $16 million joint venture between an
American software company and a member of the state controlled
I.R.I group in Italy.

     In 1990, as CEO of a software and optical storage subsidiary
in the U.S. that combined with its U.K. parent, Mr. Peterson
oversaw the simultaneous public listing in the U.K. and the U.S.


/41/


He was CFO of Heritage Media Corporation from 1998 until 2002 and
has been CFO of Heritage Scholastic since inception.  He has a
bachelor's degree in Business from the University of Colorado.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

     Section 16(a) of the Securities Exchange Act of 1934
requires the Company's directors and executive officers, and
persons who own more than ten percent of a registered class of
the Company's equity securities, to file with the SEC initial
reports of ownership and reports of changes in ownership of
Common Stock and other equity securities of the Company.
Officers, directors and greater than ten-percent stockholders are
required by SEC regulations to furnish the Company with copies of
all Section 16(a) forms they file.  To the Company's knowledge,
based solely on review of the copies of such reports furnished to
the Company and written representations that no other reports
were required during the fiscal year ended June 30, 2004, its
officers, directors and greater than ten percent beneficial
owners complied with all Section 16(a) filing requirements.

ITEM 10.  EXECUTIVE COMPENSATION.

Remuneration of Directors and Executive Officers

     We do not currently have organized labor agreements or union
agreements between Heritage Scholastic Corporation and our
employees.  Every twelve (12) months, each executive officer is
expected to draw the following annual compensation.  The officers
have agreed to work part time until the cash flow and financial
performance of the Company can support full time positions.  We
expect the time worked to increase incrementally over the next
six months to full time and we expect the time expended by the
officers under this graduated plan to be sufficient to reach our
cash flow and financial performance goals.  The following table
sets forth the annual executive compensation.

                          Capacities in which
     Name              Remuneration was Recorded    Annual Compensation4,5
     ----              -------------------------    ----------------------

Charles E. Parks      President, CEO and Director   $16,800 Annual Salary1
                                                    Beginning May 2002

Lori M. Parks         Vice President, Secretary,     $5,200 Annual Salary2
                             and Director           Beginning May 2002

Randall L. Peterson   CFO, Treasurer and Director   $16,662 Annual Salary3
                                                    Beginning May 2002

Footnotes to Executive Compensation:

1. This reflects a part time salary for approximately 1/2 day
   per week, or $168,000 annualized (see exhibit 10b).
2. This reflects a part time salary for approximately 1/4 day
   per week, or $104,000 annualized (see exhibit 10c).
3. This reflects a part time salary for approximately 1/2 day
   per week, or $166,618 annualized (see exhibit 10d).
4. Management's salary will be based upon the performance of
   the Company.  Management's performance bonuses will be decided by


/42/


   a disinterested majority of the Board of Directors of the
   Company.  In addition, management's base salaries can be
   increased by the Board of Directors of the Company based on the
   attainment of financial and other performance guidelines set by
   the Company.  Currently all members of the Board of Directors are
   executive officers of the Company.
5. Members of the Company's Board of Directors will serve until
   the next annual meeting of the stockholders and until their
   successors are duly elected and qualified, unless earlier removed
   as provided in the Bylaws of the Company.  Executive officers
   serve at the pleasure of the Board of Directors.

Compensation of directors

     There are no arrangements for our directors to be
compensated at this time, nor does the company have any intention
to provide compensation to its directors in the future.

Item 11. Security Ownership of Certain Beneficial Owners and
         Management and Related Stockholder Matters

A.   Security Ownership of Certain Beneficial Owners and
     Management and Related Stockholder Matters

     The following table sets forth as of June 30, 2004,
certain information regarding the beneficial ownership of our
common stock by (a) each person who is known us to be the
beneficial owner of more than five percent (5%) of the common
stock, (b) each of our director and executive officers and (c)
all of our directors and executive officers as a group.  Except
as otherwise indicated, the persons or entities listed below have
sole voting and investment power with respect to all shares of
common stock beneficially owned by them, except to the extent
such power may be shared with a spouse.  No change in control is
currently being contemplated.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

                          Shares                           Percentage of
                       Beneficially                           Shares
   Name and Address       Owned          Consideration      Outstanding
 -------------------- --------------    ---------------    -------------

Charles E. Parks        2,750,000          2,750,000 @          34.7
1283 Rancho                             $0.001 per share
Encinitas Drive
Olivenhain, CA 92024

Lori M. Parks           2,750,000          2,750,000 @          34.7
1283 Rancho                             $0.001 per share
Encinitas Drive
Olivenhain, CA 92024


/43/


Randall L. Peterson       600,000            600,000 @           7.6
2110 Meadowgreen Court                  $0.003 per share
Encinitas, CA 92024

Stephen G. Hung           500,000       300,000 @ $0.04          6.3
32 Beaufort Ave.                         per share and
Needham, MA 02492                       200,000 @ $0.10
                                         per share
                      --------------                       -------------

Total ownership by      6,600,000                               83.3
our officers and
directors (four
individuals)

B.   Persons Sharing Ownership of Control of Shares

     No person other than Charles E. Parks, Lori M. Parks,
Randall L. Peterson, and Stephen G. Hung owns or shares the power
to vote five percent (5%) or more of Heritage Scholastic
Corporation securities.  Charles E. Parks and Lori M. Parks are
husband and wife.

Item 12.   Certain Relationships and Related Transactions

     Heritage Scholastic Corporation purchased graphic design
services from Heritage Media Corporation pursuant to the
agreement described at Item 1, Section B.  A note payable
in the amount of $14,269 at June 30, 2003 resulted from
this purchase under the terms of this agreement.  The note
dated June 30, 2002 was a demand note bearing interest at
the rate of 6% per annum. This note has subsequently been
retired.  During the FYE June 30, 2004, advances were made
to the Company by the officers directly and by two
entities owned 100% by Charles and Lori Parks, Parks
Family LLC and Imprint Publications LLC and totaled
$47,151. There were no other actual or proposed
transactions that occurred over the past two years, to
which any person related to the issuer had or is to have a
direct or indirect material interest as set forth in item
404 of Regulation S-B of the Securities and Exchange Act
of 1933 other than the agreement with HMC as described in
Item 1 Section B paragraph (1) and the lease from HMC as
described in Item 3 Section A of this filing document.


/44/


ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K.

Exhibit   Name and/or Identification of Exhibit
 Number

   3       Articles of Incorporation & By-Laws
             (a) Articles of Incorporation filed July 30, 1999
                   Rendered as Previously Filed
             (b) Amended Articles of Incorporation filed January 11, 2002
                   Rendered as Previously Filed
             (c) By-Laws of the Company adopted July 1, 2000
                   Rendered as Previously Filed

  10       Material Contracts
             (a) Publishing Agreement with Heritage Media Corporation
                 dated March 14, 2002
                   Rendered as Previously Filed
             (b) Employment Contract between Heritage Scholastic Corp.
                 and Charles Parks
                   Rendered as Previously Filed
             (c) Employment Contract between Heritage Scholastic Corp.
                 and Lori Parks
                   Rendered as Previously Filed
             (d) Employment Contract between Heritage Scholastic Corp.
                 and Randall Peterson
                   Rendered as Previously Filed
             (e) Lease Agreement between Heritage Scholastic Corp.
                 and Heritage Media Corp.
                   Rendered as Previously Filed

  31       Rule 13a-14(a)/15d-14(a) Certification

  32       Certification under Section 906 of the Sarbanes-Oxley Act
           (18 U.S.C. SECTION 1350)


     Reports Filed on Form 8-K

     For the quarter ended June 30, 2004 the Company did not file
any reports on Form 8-K with the Securities and Exchange Commission.


ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES.


AUDIT FEES

The aggregate fees billed by the Company's auditors for
professional services rendered in connection with the audit of
the Company's annual financial statements for fiscal 2004 and
2003 and reviews of the financial statements included in the
Company's Forms 10-KSB for fiscal 2004 and 2003 were
approximately $34,000 and $26,000, respectively.


/45/


AUDIT-RELATED FEES

The Company's auditors did not bill any additional fees for
assurance and related services that are reasonably related to the
performance of the audit or review of the Company's financial
statements and are not reported under "Audit Fees" above.

TAX FEES

The aggregate fees billed by the Company's auditors for
professional services for tax compliance, tax advice, and tax
planning were $0 and $0 for fiscal 2004 and 2003, respectively.

ALL OTHER FEES

The aggregate fees billed by the Company's auditors for all other
non-audit services rendered to the Company, such as attending
meetings and other miscellaneous financial consulting, in fiscal
2004 and 2003 were $0 and $0, respectively.

AUDIT COMMITTEE

The Company currently does not have an audit committee. Our board of
directors, in consultation with our outside auditing firm, reviews the audited
financial statements annually.



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/46/


                           SIGNATURES


In accordance with Section 12 of the Securities Exchange Act of
1934, the registrant caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly
authorized.



Heritage Scholastic Corporation
(Registrant)


Date: September 27, 2004
      ------------------


By: /s/ Charles E. Parks
    --------------------
    Charles E. Parks, President and CEO





Date: September 27, 2004
      ------------------


By: /s/ Randall L. Peterson
    -----------------------
    Randall L. Peterson, Treasurer and CFO


/47/