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, 2003

     [ ]   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 0-49998


                     Heritage Scholastic Corporation
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             (Name of Small Business Issuers in its charter)


                Nevada                             33-0675154
                ------                             ----------
   (State of other jurisdiction of               I.R.S. Employer
    incorporation or organization)            Identification Number



 1954 Kellogg Avenue, Carlsbad, California           92008
 -----------------------------------------           -----
 (Address of principal executive offices)          (zip code)


Issuer's telephone number: (760) 634-3000


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


      Title of Each Class           Name on each exchange on which
      To be so registered           Each class is to be registered


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


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State issuer's revenues for its most recent fiscal year: $8,400

Securities Registered Pursuant to Section 12(g) of the Act:
Common Stock, $0.001 par value per share, 100,000,000 shares authorized,
7,918,875 issued and outstanding as of June 30, 2003 and October 17, 2003.


/1/


                                TABLE OF CONTENTS

                                                                            Page

Part I                                                                        3

 Item  1.  Description of Business                                            3

 Item  2.  Description of Property                                           10

 Item  3.  Legal Proceedings                                                 10

 Item  4.  Submission of Matters to a Vote of Security Holders               10

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

Part II                                                                      15

 Item  6.  Management's Discussion and Analysis or Plan of Operation         15

 Item  7.  Financial Statements                                              20

 Item  8.  Changes in and Disagreements with Accountants on                  20
           Accounting and Financial Disclosure

Part III                                                                     21

 Item  9.  Directors and Executive Officers, Promoters and Control           21
           Persons; Compliance with Section 16(a) of the Exchange Act

 Item 10.  Executive Compensation                                            22

 Item 11.  Security Ownership of Certain Beneficial Owners and               22
           Management and Related Stockholder Matters

 Item 12.  Certain Relationships and Related Transactions                    23

 Item 13.  Exhibits and Reports on Form 8-K                                  24

 Item 14.  Controls and Procedures                                           24

           Signatures                                                        25

           Consolidated Financial Statements                                 26


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                   Forward Looking Statements

     Some of the statements contained in this Form 10-KSB are not
historical facts but 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 involves risks and uncertainties.
Caution should be exercised in regard 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 may cause actual
results in our performance or achievements, or industry results,
to differ materially from those contemplated by such forward-
looking statements include without limitation:

     1.  Our ability to maintain, attract and integrate internal
         management, technical information and management information
         systems;
     2.  Our ability to generate customer demand for our products;
     3.  The intensity of competition; and
     4.  General economic conditions.

                             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.


/3/


     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, 2003, 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 2004.  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.


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.


/4/


     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 third 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.

     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, 2003 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.


/5/


  (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:

     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.


/6/


     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.

     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 will
grow 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.

     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.


/8/


  (5)  Raw materials and suppliers

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

  (6)  Customers

     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

     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.


/9/


 (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.  We expect to employ a
Vice President of Sales in FYE 2004.  The book editors and
authors are currently independent contractors.  It is anticipated
that this relationship will change to one of employee/employer in
FYE 2004.  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.  We expect Stephen G. Hung to enter into a
similar agreement with the Company for the position of Vice
President of Sales in FYE 2004.  We expect all four employees to
become full time in 2004 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 1954 Kellogg Ave.,
Carlsbad, CA 92008.  We have 650 square feet of office space with
a three-year lease and a monthly rent of $520 per month paid to
Parks Family, LLC.  This lease expires on December 31, 2004.
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.

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, 2003.


/10/


Item 5.     Market Price of and Dividends on the Registrant's
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, 2003, the Company has 7,918,875 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.

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.


/11/


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.  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.

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


/12/


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

     There is no current market for our common equity.  Our
common equity is not subject to outstanding warrants.  No sales
of common equity have been sold pursuant to Rule 144 of the
Securities Act, nor has an offering been made that could have a
material effect on the market price of our common equity.  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%  12/31/02   50%  6/30/04   10%  6/30/05
        Blondin

  2     Deborah      150,000    40%  12/31/02   50%  6/30/04   10%  6/30/05
        Sherwood

  3     Gina         150,000    40%  12/31/02   50%  6/30/04   10%  6/30/05
        Mancini

  4     Juan          75,000    40%  12/31/02   50%  6/30/04   10%  6/30/05
        Diaz

  5     Randall      100,000    40%  12/31/02   50%  6/30/04   10%  6/30/05
        Peterson
                    --------
             Total   625,000

(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
entity, HMC.  The options forfeited reflect options of those non-
employees that have terminated their employment with the related
entity, HMC.
(2)  There were no options granted to employees.

     There are currently 838,250 shares of our common stock which
are freely tradable and which are held of record by 56
individuals.  The remaining 7,080,625 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


/13/


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, 2003, we have 66 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.



         [balance of this page intentionally left blank]


/14/


                             Part II

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

A.   Management's Plan of Operation

  (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, 2003, we recognized
$8,400 in revenue.  Additionally, 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 sale of our products.  Our fixed and variable expenses
and our ability to control them are as follows:

     Classification       Fixed / Variable        Ability to Control
     --------------       ----------------        ------------------

  Employee Wages and      Salary = Fixed       Can reduce through lay
  Benefits                Hourly = Variable    off of personnel or
                                               outsourcing certain processes

  Subcontractor Expense   Fixed                Can reduce through
                                               discontinuation or
                                               restructuring of agreements

  Accounting and Legal    Variable             Will increase as Company
  Expenses                                     becomes fully reporting

  Building Rental         Fixed                Little control over, per
  Expense                                      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

     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.


/15/


     We believe our cash balance of $847 as of June 30, 2003,
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
$2,000, exclusive of management's salaries, which are deferred
until we begin selling our books.  In the quarter ended March
31, 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.  Management estimates that operating expenses will
increase during FYE 2004 until they reach the range of $35,000
per month, and remain in that range per month throughout the
remainder of 2004.  This includes wages and employee expenses,
rent and occupancy expenses, sales and marketing expense, and
other general and administrative expenses.

     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.

  (2)      Our total expenses for the period from July 30, 1999
(inception) to June 30, 2003 were $165,063, 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, 2003, June 30, 2002 and from
inception until June 30, 2003:


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

 Legal and                 $     73,330     $      7,543     $        80,873
  Professional Fees

 Printing Costs                   1,986            2,500               4,487
  (Marketing Materials)

 Wages and Salaries              51,865           12,077              63,942

 Rent Expense                     4,680            3,220               9,460

 Other Miscellaneous              4,626            1,635               4,702
  Administrative Expenses

 Taxes                              800              800               1,600
                          -------------    -------------    ----------------
   Total General and       $    137,288     $     27,775             165,063
    Administrative
    Expenses

     Our net loss for the year ended June 30, 2003 was $136,807
compared to a net loss of $27,775 for the year ended June 30,
2002.  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.


/16/


     We had a net decrease in cash during the year ended June
30, 2003 of $56,650.  Net cash used in operating activities
totaled ($68,892) for the year ended June 30, 2003 compared with
($7,826) for the previous year.  Net cash investing activities
provided ($957) for the year ended June 30, 2003 compared with
($14,384) used in the previous year.  This was due exclusively
to capitalized publishing costs.  Net cash provided by financing
activities totaled $14,046 for the year ended June 30, 2003
compared with $78,860 for the previous year.  This is
attributable to generating $10,000 and $75,605 in 2003 and 2002,
respectively from sales of common stock and net changes in
advance - related party.  At June 30, 2003, the Company's cash,
which includes cash reserves and cash available for investment,
was $847.

     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.

  The Market

     Technological change, continuing process development and a
reduction in school district spending may affect the markets for
our products.  Our success will depend, in part, upon our
continued ability to provide quality textbooks that meet changing
customer needs, successfully anticipate or respond to
technological changes in technological processes on a cost-
effective and timely basis and enhance and expand our client
base.  Current competitors or new market entrants may provide
products superior to ours that could adversely affect the
competitive position of our Company.  Any failure or delay in
achieving our priorities for the next six to twelve months of
operations as stated on page 12 could have a material adverse
effect on our business, future results of operations and
financial condition.


/17/


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

     During the year ended June 30, 2003 the Company generated
revenues of $8,400 compared with $0 for the previous year.  As a
development stage Educational Textbook firm, our revenue will be
derived from the sale of our educational materials.  Our goal is
to expand our revenues by entering the two or more of the
following markets in FYE 2004: San Diego, Chicago, New York
and/or Boston.  We have not received approval from these markets
as of June 30, 2003 nor have we obtained corporate sponsorship
for these markets.  And if approved in these markets, there is no
guarantee that we will receive sponsor in these markets.  We hope
in subsequent years to be able to expand our revenues by both
entering other geographic markets and diversifying the subject
matter of our textbooks.  In addition, we are in the process of
developing our Web site to provide value-added services such as
sponsor search and ordering capabilities that we hope will
enhance and grow our revenue on a consistent basis.

     Due to our status as a developmental stage company, negative
working capital, and continued losses, there is substantial doubt
about our ability to continue as a going concern.  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 operating
cash flow and the funds raised from our public offering of common
stock 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.

     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, 2003 and 2002, a current deferred tax asset
of approximately $66,000 and $12,000 had been recognized for the
temporary differences related to net operating losses carried
forward, respectively.  A valuation allowance of approximately
$66,000 and $12,000 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 $165,000 and $28,000 expire in 2022 and the state
net operating losses of approximately $165,000 and $28,000 expire
in 2011, unless previously utilized.


/18/


Critical Accounting Standards

  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 April 2002, the FASB issued SFAS No. 145, "Rescission of
FASB Statements No. 4, 44, and 64, Amendment of FASB Statement
No. 13, and Technical Corrections." SFAS No. 145 rescinds SFAS
No. 4, "Reporting Gains and Losses from Extinguishment of Debt,"
and an amendment of that SFAS, SFAS No. 64, "Extinguishment of
Debt Made to Satisfy Sinking-Fund Requirements." SFAS No. 145
also rescinds SFAS No. 44, "Accounting for Intangible Assets of
Motor Carriers."  Further, SFAS No. 145 amends SFAS No. 13,
"Accounting for Leases," to eliminate an inconsistency between
the required accounting for sale-leaseback transactions and the
required accounting for certain lease modifications that have
economic effects that are similar to sale-leaseback transactions.
SFAS No. 145 also amends other existing authoritative
pronouncements to make various technical corrections, clarify
meanings, or described their applicability under changed
conditions. This pronouncement requires gains and losses from
extinguishment of debt to be classified as an extraordinary item
only if the criteria in Accounting Principles Board Opinion No.
30, "Reporting the Results of Operations--Reporting the Effects
of Disposal of a Segment of a Business, and Extraordinary,
Unusual and Infrequently Occurring Events and Transactions," have
been met. Further, lease modifications with economic effects
similar to sale-leaseback transactions must be accounted for in
the same manner as sale-leaseback transactions. The provisions of
SFAS No. 145 related to the rescission of SFAS No. 4 shall be
applied in fiscal years beginning after May 15, 2002. The
provisions of SFAS No. 145 related to SFAS No. 13 shall be
effective for transactions occurring after May 15, 2002, with
early application encouraged. The adoption of SFAS No. 145 did
not have a material impact on the Company's consolidated
financial position or results of operations.


/19/


     In July 2002, the FASB issued SFAS No. 146, "Accounting for
Costs Associated with Exit or Disposal Activities." SFAS No. 146
requires that a liability for costs associated with an exit or
disposal activity be recognized and measured initially at fair
value only when the liability is incurred. SFAS No.146 is
effective for exit or disposal activities that are initiated
after December 31, 2002. Management does not expect the adoption
of SFAS No. 146 to have a material impact on our operating
results or financial position.

     In December 2002, the FASB issued SFAS No. 148, "Accounting
for Stock-Based Compensation-Transition and Disclosure-an
amendment of SFAS No. 123."  SFAS No. 148 provides alternative
methods of transition for a voluntary change to the fair value
based method of accounting for stock-based employee compensation.
In addition, this Statement amends the disclosures in both annual
and interim financial statements about the method of accounting
for stock-based employee compensation and the effect of the
method used on reported results. Management is evaluating the
adoption of this statement.

     In November 2002 the FASB issued FASB Interpretation ("FIN")
No. 45, "Guarantor's Accounting and Disclosure Requirements for
Guarantees, Including Indirect Guarantees of Indebtedness of
Others." FIN No. 45 elaborates on previously existing disclosure
requirements for most guarantees. It also clarifies that at the
time a company issues a guarantee, the company must recognize an
initial liability for the fair value, or market value, of the
obligations it assumes under the guarantee and must disclose that
information in its financial statements. The provisions related
to recognizing a liability at inception of the guarantee for the
fair value of the guarantor's obligations does not apply to
product warranties or to guarantees accounted for as derivatives.
FIN No. 45 also requires expanded disclosures regarding product
warranty expense. The initial recognition and initial measurement
provisions apply on a prospective basis to guarantees issued or
modified after December 31, 2002.  The adoption of this Statement
is not expected to have a material effect on the financial
statements.

     In April 2003 the FASB issued SFAS No. 149, "Amendment of
Statement 133 on Derivative Instruments and Hedging Activities."
SFAS No. 149 amends and clarifies financial accounting and
reporting for derivative instruments, including certain
derivative instruments embedded in other contracts (collectively
referred to as derivatives) and for hedging activities under SFAS
No. 133, "Accounting for Derivative Instruments and Hedging
Activities." SFAS No. 149 requires that contracts with comparable
characteristics be accounted for similarly.  SFAS No. 149 is
effective for contracts entered into or modified after June 30,
2003, and for hedging relationships designated after June 30,
2003.  The adoption of this Statement is not expected to have a
material effect on the consolidated financial statements.

     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 June 15, 2003.  The adoption of this
Statement is not expected to have a material effect on the
financial statements.

ITEM 7.  FINANCIAL STATEMENTS

     Please see our audited consolidated financial statements for
the period ended June 30, 2003 attached hereto.

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

The Company had not retained independent accountants prior to
engaging Nation Smith Hermes Diamond ("Nation") as independent
auditors.  During the prior two years ended June 30, 2003,
neither the Company nor anyone on its behalf consulted Nation
regarding either the application of accounting principles to a
specified transaction, either completed or proposed, or the type
of audit opinion that might be rendered on the Company's
consolidated financial statements, nor has Nation provided to the
Company a written report or oral advice regarding such principles
or audit opinion. We have had no disagreements with our
independent accountants.


/20/


                            Part III

Item 9.     Directors and 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       44   President, CEO and Director    Since July 1999

Lori M. Parks          36    Vice President, Secretary,    Since July 1999
                                  and Director

Randall L. Peterson    52   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 Publishing Company in 1992.
Over the years, Charles founded or co-founded several
corporations, which gave him the expertise to mold Heritage Media
Corp. into the successful enterprise it is today.

     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 and has used her marketing, editing and public relations
expertise in her position as managing editor to further HMC's
success.

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


/21/


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,     $4,800 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 $96,000 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
   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 September 30, 2002,
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.


/22/



                          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

Randall L. Peterson       600,000            600,000 @          7.6
2110 Meadowgreen                        $0.003 per share
Court
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 (three
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.  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.



         [balance of this page intentionally left blank]


/23/


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, 2003 the Company did not file
any reports on Form 8-K with the Securities and Exchange
Commission.


ITEM 14.  CONTROLS AND PROCEDURES

     Within 90 days of the filing date of this report, we carried
out an evaluation, under the supervision and with the
participation of our management, including our Chief Executive
Officer and Chief Financial Officer, of the effectiveness of the
design and operation of our disclosure controls and procedures.
Based upon that evaluation, our Chief Executive Officer and Chief
Financial Officer have concluded that our disclosure controls and
procedures are effective to ensure that information required to
be disclosed by us in the reports that we file under the Exchange
Act is accumulated and communicated to management, including our
Chief Executive Officer and Chief Financial Officer, as
appropriate to allow timely decisions regarding required
disclosure. There have been no significant changes in our
internal controls or in other factors that could significantly
affect internal controls subsequent to the date of our
evaluation, including any significant actions regarding any
deficiencies. We intend to review our controls and procedure
regularly with our management and Board of Directors.


/24/


                           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: October 17, 2003
      ----------------


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




Date: October 17, 2003
      ----------------


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


/25/


Item 7.  Consolidated financial statements (June 30, 20032 Audit)

         The following documents are filed as part of this report:

         Heritage Scholastic Corporation                      Page

         Independent Auditor's Report                           27

         Consolidated Balance Sheets                            28

         Consolidated Statements of Operations                  29

         Consolidated Statements of Cash Flows                30-31

         Consolidated Statements of Stockholders' Deficit     32-33

         Notes to Consolidated Financial Statements           34-42


/26/


Independent Auditors' Report
                                      Nation Smith Hermes Diamond
                                            San Diego, California

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


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


October 10, 2003
San Diego, California


/27/


                                               Heritage Scholastic Corporation
                                                 (a Development Stage Company)

                                                   Consolidated Balance Sheets

==============================================================================
June 30,                                                 2003          2002
------------------------------------------------------------------------------

Assets

Current Assets
 Cash (Note 1)                                        $     847     $     824
 Restricted cash (Note 1)                                     -        55,826
 Accounts receivable                                      3,300             -
 Inventory                                                5,481             -
 Prepaid expenses                                         4,000             -
------------------------------------------------------------------------------

Total current assets                                     13,628        56,650

Capitalized Publishing Costs (Note 1)                    15,341        14,384
------------------------------------------------------------------------------

                                                      $  28,969     $  71,034
==============================================================================

Liabilities and Stockholders' Equity (Deficit)

Current Liabilities
 Accounts payable and accrued expenses                $  12,625     $   6,273
 Wages payable                                           31,752         6,376
 Income taxes payable (Note 4)                            1,600         1,600
 Deferred revenue (Note 1)                               12,000             -
 Note payable-related party (Note 3)                     14,269         3,255
------------------------------------------------------------------------------

Total liabilities                                        72,246        17,504

Commitments and Contingencies (Note 2, 8 and 9)

Stockholders' Equity (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 7,918,875 and 7,618,875 shares
  issued and outstanding                                  7,919         7,619
 Additional paid-in capital                             113,386        73,686
 Deficit accumulated during the development stage      (164,582)      (27,775)
------------------------------------------------------------------------------

Total stockholders' equity (deficit)                    (43,277)       53,530
------------------------------------------------------------------------------

                                                      $  28,969     $  71,034
==============================================================================
             The accompanying notes are an integral part of these consolidated
                                                         financial statements.


/28/


                                               Heritage Scholastic Corporation
                                                 (a Development Stage Company)

                                         Consolidated Statements of Operations

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

Revenues                              $   8,400    $       -     $      8,400

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

Gross Profit                                481            -              481

General and administrative expenses     137,288       27,775          165,063
------------------------------------------------------------------------------

Net Loss                               (136,807)     (27,775)        (164,582)
------------------------------------------------------------------------------

Loss Per Share of Common Stock            (0.02)        0.00
------------------------------------------------------------------------------

Weighted Average Shares Outstanding   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.


/29/


                                               Heritage Scholastic Corporation
                                                 (a Development Stage Company)

                                         Consolidated Statements of Cash Flows

==============================================================================
                                                              And Period from
                                                              Inception (July
                                                                 30, 1999) to
June 30,                                   2003        2002     June 30, 2003
------------------------------------------------------------------------------
Cash Flows From Operating Activities
Net loss                                 (136,807)   (27,775)        (164,582)
Adjustments to reconcile net loss
 to net cash used in
 operating activities:
   Non-cash stock based                    30,000      5,700           35,700
    compensation expense
Change in operating assets
 and liabilities:
   Accounts receivable                     (3,300)         -           (3,300)
   Inventory                               (5,481)         -           (5,481)
   Prepaid expenses                        (4,000)         -           (4,000)
   Accounts payable and accrued expenses   13,320      6,273           19,593
   Wages and related taxes payable         25,376      6,376           31,752
   Income taxes payable                         -      1,600            1,600
   Deferred revenue                        12,000          -           12,000
------------------------------------------------------------------------------

Net cash used in operating activities     (68,892)    (7,826)         (76,718)
------------------------------------------------------------------------------

Cash Flows From Investing Activities
   Increase in capitalized publishing costs  (957)   (14,384)         (15,341)
------------------------------------------------------------------------------

Cash Flows From Financing Activities
   Net proceeds from issuance of           10,000     75,605           85,605
    common stock
   Net change in advances -                 4,046      3,255            7,301
    related party
------------------------------------------------------------------------------

Net cash provided by financing activities  14,046     78,860           92,906
------------------------------------------------------------------------------

Net increase (decrease) in cash           (55,803)    56,650              847
------------------------------------------------------------------------------

Cash at Beginning of Period                56,650          -                -
------------------------------------------------------------------------------

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

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


/30/


                                               Heritage Scholastic Corporation
                                                 (a Development Stage Company)

                                 Consolidated Statements of Cash Flows, Cont'd

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

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, 2003 and 2002, the Company recorded
non - cash stock based compensation expense of $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.


/31/


                                               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)

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.


/32/


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


/33/


                                     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.   The
                   Parks' are also shareholders in the Company.  The
                   Company    also   shares   officers,   directors,
                   facilities, and other various resources with  HMC
                   (see Note 8).

                   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,
                   2003,  and  the period from inception  (July  30,
                   1999  to June 30, 2003), 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.


/34/


                                     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.

                    Restricted    cash  pertains    to   cash     on
                    deposit    and  deposits in   transit    into  a
                    bank    account    controlled   by    an  escrow
                    attorney   from   proceeds   from a common stock
                    offering  completed in June 2002.  The cash  was
                    transferred   into   the     Company's   general
                    operating bank account   in August 2002.

   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.


/35/


                                     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,
                    2003, there were 625,000 options   that were not
                    included as the calculation of loss per share as
                    their effect would have been anti-dilutive  (see
                    Note 7).

   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 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.


/36/


                                     Heritage Scholastic Corporation
                                       (a development stage company)


                          Notes to Consolidated Financial Statements

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

   Recent           In  April  2002, the FASB issued SFAS  No.  145,
   Accounting       "Rescission of FASB Statements No.  4,  44,  and
   Pronouncements   64,  Amendment  of FASB Statement  No.  13,  and
                    Technical  Corrections." SFAS No.  145  rescinds
                    SFAS  No.  4,  "Reporting Gains and Losses  from
                    Extinguishment  of Debt," and  an  amendment  of
                    that  SFAS, SFAS No. 64, "Extinguishment of Debt
                    Made to Satisfy Sinking-Fund Requirements." SFAS
                    No.  145  also rescinds SFAS No. 44, "Accounting
                    for   Intangible  Assets  of  Motor   Carriers."
                    Further,  SFAS  No.  145  amends  SFAS  No.  13,
                    "Accounting   for  Leases,"  to   eliminate   an
                    inconsistency  between the  required  accounting
                    for sale-leaseback transactions and the required
                    accounting for certain lease modifications  that
                    have  economic effects that are similar to sale-
                    leaseback transactions. SFAS No. 145 also amends
                    other  existing authoritative pronouncements  to
                    make   various  technical  corrections,  clarify
                    meanings, or described their applicability under
                    changed  conditions. This pronouncement requires
                    gains and losses from extinguishment of debt  to
                    be  classified as an extraordinary item only  if
                    the  criteria  in  Accounting  Principles  Board
                    Opinion  No.  30,  "Reporting  the  Results   of
                    Operations--Reporting the Effects of Disposal of
                    a  Segment  of  a  Business, and  Extraordinary,
                    Unusual  and Infrequently Occurring  Events  and
                    Transactions,"  have  been met.  Further,  lease
                    modifications with economic effects  similar  to
                    sale-leaseback  transactions must  be  accounted
                    for   in   the  same  manner  as  sale-leaseback
                    transactions.  The provisions of  SFAS  No.  145
                    related to the rescission of SFAS No. 4 shall be
                    applied in fiscal years beginning after May  15,
                    2002. The provisions of SFAS No. 145 related  to
                    SFAS  No. 13 shall be effective for transactions
                    occurring   after  May  15,  2002,  with   early
                    application encouraged. The adoption of SFAS No.
                    145  did  not  have  a material  impact  on  the
                    Company's  consolidated  financial  position  or
                    results of operations.

                    In July  2002,  the FASB issued  SFAS  No.  146,
                    "Accounting  for Costs Associated  with Exit  or
                    Disposal Activities." SFAS No. 146 requires that
                    a liability for costs associated with an exit or
                    disposal activity  be  recognized  and  measured
                    initially at fair value only when the  liability
                    is incurred. SFAS No.146 is effective for exit or
                    disposal activities  that  are  initiated  after
                    December 31, 2002. Management does not expect the
                    adoption  of  SFAS  No. 146 to  have  a material
                    impact  on  our  operating results  or financial
                    position.

                   In  December 2002, the FASB issued SFAS No.  148,
                   "Accounting    for   Stock-Based    Compensation-
                   Transition  and Disclosure-an amendment  of  SFAS
                   No.  123."   SFAS  No.  148 provides  alternative
                   methods  of transition for a voluntary change  to
                   the  fair  value  based method of accounting  for
                   stock-based  employee compensation. In  addition,
                   this  Statement  amends the disclosures  in  both
                   annual and interim financial statements about the
                   method  of  accounting  for stock-based  employee
                   compensation and the effect of the method used on
                   reported  results. Management is  evaluating  the
                   adoption of this statement.


/37/


                                     Heritage Scholastic Corporation
                                       (a development stage company)


                          Notes to Consolidated Financial Statements

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

   Recent           In   November   2002   the  FASB   issued   FASB
   Accounting       Interpretation  ("FIN")  No.  45,   "Guarantor's
   Pronouncements,  Accounting   and  Disclosure  Requirements   for
   cont'd           Guarantees,  Including  Indirect  Guarantees  of
                    Indebtedness  of Others." FIN No. 45  elaborates
                    on  previously existing disclosure  requirements
                    for  most guarantees. It also clarifies that  at
                    the  time  a  company issues  a  guarantee,  the
                    company must recognize an initial liability  for
                    the   fair  value,  or  market  value,  of   the
                    obligations  it assumes under the guarantee  and
                    must  disclose that information in its financial
                    statements.    The   provisions    related    to
                    recognizing  a  liability at  inception  of  the
                    guarantee  for the fair value of the guarantor's
                    obligations does not apply to product warranties
                    or  to  guarantees accounted for as derivatives.
                    FIN  No.  45  also requires expanded disclosures
                    regarding product warranty expense. The  initial
                    recognition  and initial measurement  provisions
                    apply  on  a  prospective  basis  to  guarantees
                    issued or modified after December 31, 2002.  The
                    adoption  of  this  Statement  is  not  expected
                    to  have  a  material effect  on  the  financial
                    statements.

                    In  April  2003  the FASB issued SFAS  No.  149,
                    "Amendment   of  Statement  133  on   Derivative
                    Instruments and Hedging Activities."   SFAS  No.
                    149  amends  and clarifies financial  accounting
                    and   reporting   for  derivative   instruments,
                    including    certain   derivative    instruments
                    embedded   in   other  contracts   (collectively
                    referred  to  as  derivatives) and  for  hedging
                    activities  under SFAS No. 133, "Accounting  for
                    Derivative  Instruments and Hedging Activities."
                    SFAS   No.  149  requires  that  contracts  with
                    comparable  characteristics  be  accounted   for
                    similarly.   SFAS  No.  149  is  effective   for
                    contracts  entered into or modified  after  June
                    30,   2003,   and   for  hedging   relationships
                    designated after June 30, 2003.  The adoption of
                    this  Statement  is  not  expected  to  have   a
                    material  effect  on the consolidated  financial
                    statements.

                    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  June  15,  2003.   The
                    adoption  of  this  Statement  is  not  expected
                    to  have  a  material effect  on  the  financial
                    statements.


/38/


                                     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 subsequent to year end.

4. Income           As    of    June  30, 2003 and 2002,  a  current
   Taxes            deferred     tax    asset    of    approximately
                    $66,000 and $12,000 had been recognized for  the
                    temporary differences related   to net operating
                    losses   carried   forward,  respectively.     A
                    valuation allowance of approximately $66,000 and
                    $12,000  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
                    $165,000  and  $28,000 expire in  2022  and  the
                    state  net  operating  losses  of  approximately
                    $165,000  and  $28,000 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, 2002.

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.


/39/


                                     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.

7. Stock
   Option/Stock
   Issuance
   Plan

   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%
                     June 30, 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  $10,000 and $5,700 for the years ended  June
                    30, 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.


/40/


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

                    Stock  options that were exercisable as of  June
                    30,   2003  and  2002  were  250,000  and   zero
                    respectively, the contractual remaining life  of
                    the option pool is 5 years.  There have been  no
                    options grants to employees.

8. 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 expires in December 2004
                    whereby  the Company agreed to pay 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, 2003 and 2002, respectively.
                    Future   minimum   lease  payments   under   the
                    agreement are as follows:  $6,240 for  the  year
                    ending  June 30, 2004 and  $3,120 for  the  year
                    ending June 30, 2005.

                    Management  believes the risk to the Company  is
                    minimal  if  HMC  breaches  or  terminates  this
                    contract  as there are other vendors that  could
                    perform these duties.


/41/


                                     Heritage Scholastic Corporation
                                       (a development stage company)


                          Notes to Consolidated Financial Statements

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

8. 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..

9. 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.


/42/