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UNITED STATESSECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549

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FORM 10-KSB/A
Amendment No. 1








| |                                                                                      | 
| | ------------------------------------------------------------------------------------ | 
| | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | 
| | For the fiscal year ended December 31, 2002                                          | 
| |                                                                                      | 

Commission File Number: 000-30949

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THOROUGHBRED INTERESTS, INC. 127 SOUTH 6th STREETLOUISVILLE, KY 40202(502)584-4434


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|                       |  |                                             
|---------------------- |  | --------------------------------------------
|                       |  |                                             
|Incorporated in Nevada |  | I.R.S. EmployerIdentification No. 61-1342734

Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act: COMMON STOCK, par value $0.001 per share

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

Check of there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no
disclosure will be contained , to the best of Registrants knowledge, in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB  ̈

   Registrants revenues for its most recent fiscal year (ended December 31, 2002):
$1,972,307
   Aggregate market value of voting stock held by non-affiliates: N/A

   Indicate the number of shares outstanding of each of the Registrants classes of common stock:


   29,292,813 common shares were outstanding as of December 31, 2002.

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|THOROUGHBRED
INTEREST, INC.                              
|---------------------------------------------------------
|FORM 10-KSB/A FOR THE FISCAL YEAR ENDED DECEMBER 31, 2002

# 

# TABLE
OF CONTENTS

|PART I               | Page                                                     
|-------------------- | ---------------------------------------------------------
|                    
|Item 1.              | DESCRIPTION OF BUSINESS.                                 
|                    
|Item 2.              | DESCRIPTION OF PROPERTY.                                 
|                    
|Item 3.              | LEGAL PROCEEDINGS.                                       
|                    
|Item 4.              | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.     
|                    
|PART II             
|                    
|Item 5.              | MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
|                    
|Item 6.              | MANAGEMENTS DISCUSSION AND ANALYSIS OF                  
|                     | FINANCIAL CONDITION AND RESULTS OF OPERATIONS.           
|                    
|Item 7.              | FINANCIAL STATEMENTS.                                    
|                    
|Item 8.              | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.           
|                    
|PART III             |                                                          
|                    
|Item 9.              | DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND             
|                     | CONTROL PERSONS; COMPLIANCE WITH                         
|                     | SECTION 16(a) OF THE EXCHANGE ACT.                       
|                    
|Item 10.             | EXECUTIVE COMPENSATION.                                  
|                    
|Item 11.             | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS          
|                     | AND MANAGEMENT.                                          
|                    
|Item 12.             | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.          
|                    
|Item 13.             | EXHIBITS AND REPORTS ON FORM 8-K.                        
|                    
|Item 14.             | CONTROLS AND PROCEDURES.                                 
|                    
|SIGNATURES           |                                                          
|                    
|FINANCIAL STATEMENTS | F-1                                                      
|                    
|CERTIFICATIONS       |                                                          

1

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Table of Contents

EXPLANATORY NOTE

This Form 10-KSB/A is being filed solely for the purpose
of revising managements discussion and analysis of financial condition and results of operations that was contained in the Form 10-KSB filed with
the Commission on April 22, 2003. Other than the revised managements discussion and analysis, which appears on page 8 to this Form 10-K/A and
there are no changes to the original Form 10-KSB.

This Form 10-KSB/A does not reflect events occurring after the filing of the original Form 10-KSB.

2

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Table of Contents

PART
I

ITEM 1.   DESCRIPTION
OF BUSINESS

We
were organized as a business corporation under the laws of the State of Nevada
on March 25, 1999. We were formed to engage in pinhooking and racing
of thoroughbred horses. Pinhooking involves the purchase of a
yearling, that is, a horse which is between one and two years old, with a view
towards training and then reselling that horse as a two-year old. Those horses
that we are unable to pinhook at an acceptable profit we plan to enter in races
because we expect that if a horse is successful at racing, its value will
increase. Pinhooking also involves the purchase of a weanling, that
is, a horse which is less than one year old and reselling as a yearling. As of
March 31, 2003 we held full title to 4 thoroughbreds and ownership interests,
ranging from 5% to 90%, in two thoroughbreds. We purchase most of our
thoroughbreds from non-affiliated breeders of thoroughbred yearlings through
non-affiliated industry auction houses, such as Fasig-Tipton, Keeneland and
Ocala Breeders Sales Company.

Our
Chief Executive Officer, President and sole employee, James D. Tilton, Jr., currently
makes all the decisions regarding the  purchasing, training, racing and selling of our
thoroughbred horses. In particular, Mr. Tilton makes the decisions regarding: (i)
whether to purchase a certain thoroughbred horse; (ii) who should be retained to break-in
and train the thoroughbred; (iii) whether  the thoroughbred should be sold as a yearling
or two year old (i.e., pinhooked); (iv) whether the thoroughbred should be entered into
races; and (v) if raced, at what point if any, the thoroughbred should be sold. Mr.
Tilton has limited experience in pinhooking and  racing of thoroughbred horses. As a
result, Mr. Tilton may, from time to time, retain consultants experienced in the
thoroughbred  industry to: (i) assist him in determining which thoroughbreds to purchase;
(ii) assist him in training the purchased thoroughbreds;  and (iii) assist him in
determining whether the thoroughbred should be sold as a two year old or raced.

We
expect to incur numerous expenses in our efforts to pinhook and race
thoroughbred horses. First, we expect to pay a 5% acquisition fee for all
thoroughbreds we purchase with the assistance of a consultant. Second, we plan
to hire horse trainers to maintain, care and train our thoroughbreds. Such horse
trainers or others they hire will bill us for veterinary, food, shipping,
blacksmith, breaking in and training expenses. We also expect to make payments
to these horse trainers and consultants 5% of the sales price of each
thoroughbred that they train and we successfully sell. Additional expenses could
include sale nominations and entry fees, advertising and video production.

We
also expect to incur mortality and surgical insurance expense. This insurance
will cost approximately 2.5% of the purchase price of each horse. Additionally,
for each thoroughbred we sell at auction, we expect to pay a fee of 5% of the
sale price to the auction house.

TRANSACTIONS
IN THOROUGHBRED HORSES DURING THE LAST 15 MONTHS

The
following is a detailed chronology of the steps we have taken in furtherance of
our business plan since January 2002.

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|(a)  January 2002:  | The Company sold privately a Siphon Colt for $200,000 before expenses. The Colt  
|------------------- | ---------------------------------------------------------------------------------
|                    | was originally purchased for $40,000 in September 2001. We also sold LawnMower   
|                    | privately, a Green Dancer Colt, for $105,000 before expenses. LawnMower was      
|                    | originally acquired in September 2000 for $48,000 and earned the Company nearly  
|                    | $25,000 before being sold.                                                       
|                   
|(b)  February 2002: | The Company sold privately a Forest Wildcat Colt for $107,500 before expenses    
|                    | which was originally purchased at the Keeneland September 2001 Yearling sale for 
|                    | $70,000. We also sold an Indian Charlie Colt at the Fasig Tipton Calder          
|                    | Two-Year-Olds in Training Sale for $175,000 before expenses. The horse was also  
|                    | originally purchased at the Keeneland September 2001 Yearling Sale for $40,000.  
|                   
|(c)  March 2002:    | The Company sold a Storm Boot Colt for $45,000 before expenses at the Ocala      
|                    | Breeders Ocala Breeders Sales March Two-Year-Olds in Training Sale. The Colt was 
|                    | originally purchased in September 2001 at Keeneland Yearling Sale for $7,500.    
|                   
|(d)  April 2002:    | The Company sold a 50% interest in a Tinners Way Colt at the Keeneland April 2002
|                    | Two-Year Olds in Training for $100,000. The interest in the Colt was originally  
|                    | purchased at the Fasig Tipton October 2001 Sale for $10,000. The Company at the  
|                    | same sale gets $225,000 for American Boundary, a Boundary Colt who was originally
|                    | purchased at the Keeneland September 2001 yearling Sale for $75,000. The Company 
|                    | also sells a Deputy Commander Filly for $290,000 which was also purchased at the 
|                    | Keeneland September 2001 Sale for $50,000. These figures are before associated   
|                    | expenses.                                                                        
|                   
|(e)  May 2002:      | The Company sold at the Fasig Tipton Maryland Two-Year Olds in Training Sale an  
|                    | End Sweep Filly for $145,000. The horse was originally purchased at the Fasig    
|                    | Tipton October 2001 Midatlantic sale for $30,000. These figures are before       
|                    | associated expenses.                                                             
|                   
|(f)  June -         | The Company sold five horses at various prices suffering a loss on the group     
|September 2002:     | before associated expenses. The estimated loss before expenses was approximately 
|                    | $40,000.                                                                         
|                   
|(g)  December 2002: | Bootleg and Susy was claimed for a loss. The approximate loss before expenses was
|                    | $30,000.                                                                         
|                   
|(h)  January 2003:  | 45% of Stravinsky/Slide By was sold for a loss of approximately $7500 before     
|                    | associated expenses.                                                             
|                   
|(i)  February 2003: | 90% of Two Punch/Why Walk sold for a profit of approximately $7,500 before       
|                    | associated expenses.                                                             
|                   
|(j)  March 2003:    | Hennessy/Skyward Melody was sold for a loss of approximately $7,500 before       
|                    | associated expenses. 90% of Marias Mon/I Love Green sold for a profit of $10,000
|                    | before associated expenses. 90% of Solver/Liz Cee sold for a profit of           
|                    | approximately $50,000 before associated expenses.                                

4

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INVENTORY OF
OUR HORSES

The
following is an inventory of the Companys horses as of March 31, 2003:

|Name of Horse              | Type        | DateAcquired | Seller/PlaceofPurchase | AffiliationtoPurchaser | Source ofFinancing
|-------------------------- | ----------- | ------------ | ---------------------- | ---------------------- | ------------------
|Explosive Appeal           | Colt 3 Yr.  | 06/02        | OBS Sales              | None                   | (1)               
|Gold Fever/Endicotta Ridge | Filly 2 Yr. | 08/02        | Barretts               | None                   | (1)               
|5% of Della Francesa       | Colt 4 Yr.  | 09/02        | Private                | None                   | (1)               
|90% of Soldier Song Colt   | Colt 4 Yr.  | 09/02        | Private                | None                   | (1)               
|Deputy Commander/Mt. Cuba  | Filly 2 Yr. | 09/02        | Keeneland              | None                   | (1)               
|Cherokee Run/Dancing Dawn  | Colt 2 Yr.  | 09/02        | Keeneland              | None                   | (1)               

|(1) | Purchase financed from reinvested sales proceeds.  Title to the horses are in the name of James D. Tilton, Jr.
|--- | --------------------------------------------------------------------------------------------------------------

RISK FACTORS

An
investment in our Common Stock involves risks. You should be able to bear a complete loss
of your investment. You should  consider the following risks, among others.

We
have incurred losses from inception and just started generating profits with 2002 being
our first profitable year.

We
have only been incorporated since 1999 and we are still structuring and developing our
management and operations. Our  operations are subject to all of the risks inherent in
the establishment of a new business enterprise, including the lack of  significant
operating history. There can be no assurance that future operations will continue to be
profitable. Revenues and profits,  if any, will depend upon various factors, including
our ability to acquire horses suitable for pinhooking, to adequately train such  horses
in order that they achieve their potential, the expertise of our management, the market
acceptance of the products offered,  costs and general economic conditions. There can be
no assurance that we will achieve our projected goals or accomplish our business  plans;
and such failure could have a material adverse effect on us and the value and price of
our securities.

Because
of the limited experience of management in pinhooking and racing of thoroughbred horses
our business could suffer.

James
D. Tilton, our President and sole employee, currently makes all of our decisions
regarding the purchasing, training,  racing and selling of our thoroughbred horses. Mr.
Tilton has had limited experience in pinhooking and racing of thoroughbred horses.  There
can be no assurance that Mr. Tilton will be able to make the decisions necessary to earn
a profit in the business.

We
may need additional capital and may not be able to obtain it in which case our ability to
continue in business would be  materially and adversely affected.

We
may be required to seek additional funds and to raise additional capital from public or
private equity or debt sources in  order to fund our general and administrative costs and
expenses, pay off startup loans, support further expansion, meet competitive  pressures,
or respond to unanticipated requirements.

5

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There
is no guarantee that we will be able to raise any such capital on terms acceptable to us
or at all. Such financing may be  upon terms that are dilutive or potentially dilutive to
our stockholders. If alternative sources of financing are required, but are  insufficient
or unavailable, we will be required to modify our growth and operating plans in
accordance with the extent of available  funding. At the present time, we do not intend
to obtain any loan financing from a lending institution. If necessary, Mr. Tilton may
continue to make personal loans to us at or below market rates, on terms customarily used
by lending institutions in making loans.

If
we are required to obtain loan financing, the amount of our profits (if any) will
decrease or the amount of our losses will  increase due to the interest charged on the
loan. Loan financing may subject our operations to restrictions imposed by the lending
institution, hindering our ability to operate in the manner best determined by our
management and/or Board of Directors, with the  potential that such restrictions will
impede or prevent our growth and/or negatively impact our level of profits. Additionally,
the  use of debt financing or leverage would subject us to the risk that any downturns in
the thoroughbred industry and any changes in  interests rates (if we have an adjustable
rate loan) will substantially increase the likelihood that our operations will not be
profitable, possibly causing us to become bankrupt or to dissolve the corporation.

We
depend on key personnel and may not be able to retain them.

Our
future success will depend largely on the efforts and abilities of our management,
especially of our current sole officer,  employee and director, James D. Tilton, Jr. The
loss of the services of Mr. Tilton or the inability to attract additional,  experienced
management personnel could have a substantial adverse effect on us. We have not obtained
a "key man" insurance policy for  Mr. Tilton. Our ability to implement our
strategies depends upon our ability to attract highly talented managerial personnel.
There  can be no assurance that we will attract and retain such employees in the future.

If
we are unable to effectively manage our anticipated growth, our business, financial
results and financial condition will be  materially and adversely affected.

Our
inability to effectively manage our future growth will have a material adverse effect on
us. We anticipate that we might at  some point have rapid growth in the number of horses
that we own. This will place a strain on our managerial, operational, and  financial
resources. We will initially use outside consultants and specialists to provide
thoroughbred consulting, legal counsel and  preliminary accounting until such persons are
required on a full time or ongoing basis. We currently employ one person, Mr. Tilton.
Our future employment of personnel is dependent on the number of horses we obtain. We
expect to continue employing an outside  bookkeeper. There can be no assurance that we
will be able to effectively manage the expansion of our operations, or that our
facilities, systems, procedures or controls will be adequate to support our expanded
operations.

We
may not be able to comply with all current and future government regulation.

Our
business operations are subject to all government regulations normally incident to
conducting business (e.g., occupational  safety and health acts, workmens compensation
statutes, unemployment insurance legislation, income tax and social security laws and
regulations, environmental laws and regulations, consumer safety laws and regulations,
etc.) as well as to governmental laws and  regulations applicable to small public
companies and their capital formation efforts. In addition, we are subject to laws and
regulations regarding the purchase, sale, breeding, transportation, care, and possibly,
racing of horses. Although we will make every  effort to comply with applicable laws and
regulations, we can provide no assurance of our ability to do so, nor can we predict the
effect of those regulations on our proposed business activities.

If
we are unable to compete effectively with our competitors, we will not be able to
increase revenues or generate profits.

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Our
ability to increase revenues and generate profitability is directly related to our
ability to compete effectively with our  competitors. There are many competitors in the
pinhooking industry. Due to the fact that the majority of pinhooking operations are  run
by private companies and partnerships, we are unable to state the size or profitability
of our competitors.

ITEM 2.
DESCRIPTION OF PROPERTY.

Our executive and administrative office is located at 127 South 6th Street,
Louisville, Kentucky 40202. We lease this facility from a non-affiliated party.
It has approximately 1865 square feet of office space consisting of three
separate offices, a library, a conference room, a kitchen and a bathroom. The
monthly rent is $2,360.

ITEM 3. LEGAL
PROCEEDINGS.

As
of December 31, 2002, and as of the date of this filing, the Company is not a party to
any pending or threatened litigation,  claim or assessment, except for the threatened,
but not pending, claim by a former printing company Starkey & Hendricks for $57,030.
This claim is currently in settlement discussions.

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

No
matters were submitted for shareholder approval during the forth quarter of the fiscal
year covered by this Report.

PART II.

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

A
limited public market for the Companys Common Stock exists on the NASDAQ Bulletin Board
under the symbol "TBIN."

The
following table sets forth the range of high and low closing prices for the Companys
Common Stock for each quarterly period  indicated, as reported by brokers and dealers
making a market in the capital stock. Such quotations reflect inter-dealer prices
without retail markup, markdown or commission, and may not necessarily represent actual
transactions. The Companys Common Stock  commenced trading on November 30, 2001.

|                                      | High |  | Low
|------------------------------------- | ---- |  | ---
|For the quarter ended March 31, 2003  |      |  | $  
|                                      |      | 
|For the year ended December 31, 2002: |      |  |    
|March 31                              |      |  | $  
|June 30                               |      |  | $  
|September 30                          |      |  | $  
|December 31                           |      |  | $  
|                                      |      | 
|For the year ended December 31, 2001: |      |  |    
|December 31                           |      |  | $  

As
of March 31, 2003, there were approximately 425 record holders of the Companys Common
Stock.

The
Company has not paid any cash or other dividends on its Common Stock since its inception
and does not anticipate paying any  such dividends in the foreseeable future.  The
Company intends to retain any earnings for use in the Companys operations and to
finance the expansion of its business.

7

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ITEM 6.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

This
Annual Report on Form 10-KSB/A and the information incorporated by reference may include
"forward-looking statements" within  the meaning of Section 27a of the
securities act and section 21e of the exchange act. We intend the forward-looking
statements to be  covered by the safe harbor provisions for forward-looking statements.
All statements regarding our expected financial position and  operating results, our
business strategy, our financing plans and the outcome of any contingencies are
forward-looking statements.  The forward-looking statements are subject to risks and
uncertainties that could cause actual results to differ materially from those  set forth
or implied by any forward looking statements.

The following
discussion should be read in conjunction with Thoroughbred Interests financial statements and the related notes
included in this Form 10-KSB/A.

Overview

Thoroughbred
Interests was incorporated under the laws of the State of Nevada in 1999. Following its incorporation, Thoroughbred
Interests entered into the pinhooking and racing of thoroughbred horses.  To date, substantially all of Thoroughbred Interests
revenues have been generated from the pinhooking of thoroughbred horses.

Operating Results
for the Twelve Months Ended December 31, 2002 and 2001

Revenues.     Thoroughbred Interests revenues for the twelve months ended
December 31, 2002 were $1,972,307 compared to $883,179 for the same period in 2001. This increase in revenues
for 2002 resulted from the larger number of horses sold during fiscal year 2002 than fiscal year 2001.

Cost of Horses Sold.     The cost of horses sold for the twelve months ended December 31, 2002 was $810,500 compared
to $409,165 for the same period in 2001.  The increase in the cost of horses sold for 2002 is reflective of the fact
that more sales of horses occurred during fiscal year 2002.

Gross Profit.     
Our gross profit for the twelve months ended December 31, 2002 was $1,161,807 compared to $474,014 for the same period
ended in 2001.  The increase in gross profit for 2002 is the result of more horses being sold at a profit during fiscal
year 2002 than during fiscal year 2001.

Operational
Expenses     
Our operational expenses for the twelve months ended December 31, 2002 were $844,124 compared to $451,851 for the same
period in 2001.  The increase in operational expenses for 2002 is the result of more horses being sold as well as
increase costs associated with raising capital and professional fees.

General and Administrative.     
Our general and administrative expenses for the twelve months ended December 31, 2002 were $212,662 compared to $147,509 for the
same period in 2001. This increase is due to increased business activity in fiscal year 2002.

Interest Expense.     
Our interest expense for the twelve months ended December 31, 2002 was $23,574 versus $39,850 for 2001.  The decrease in
interest expense in fiscal year 2002 was due to the note conversions and repayment of certain related party loans.

Net Income.     
Our net income for the twelve months ended December 31, 2002 was $81,447 versus a loss in 2001 of ($165,196).
The turnaround in profitability in fiscal year 2002 was reflective of more horses being sold profitably during fiscal year 2002.

Changes In
Balance Sheet.     
As of December 31, 2002, Thoroughbred Interests had current assets of $495,069 as compared to $1,193,322 at December 31, 2001,
total assets of $559,649 at December 31, 2002 as compared to $1,193,322 at December 31, 2001 and stockholders equity (deficit)
at December 31, 2002 of ($123,223) as compared to ($690,635) at December 31, 2001.  The decrease in current and total assets in
fiscal year 2002 was primarily the result of less horses inventoried and repayment of certain related party loans.
The increase in stockholders equity (deficit) was primarily the result of profitability and the competition of the preferred
stock offering during 2002.

Liquidity and
Capital Resources.     
As of December 31, 2002, Thoroughbred Interests had current assets of $495,069 as compared to $1,193,322 at December 31, 2001,
total assets of $559,649 at December 31, 2002 as compared to $1,193,322 at December 31, 2001 and stockholders equity (deficit)
at December 31, 2002 of ($123,223) as compared to ($690,635) at December 31, 2001.  The decrease in current and total assets in
fiscal year 2002 was primarily the result of less horses inventoried and repayment of certain related party loans.
The increase in stockholders equity (deficit) was primarily the result of profitability and the competition of the preferred
stock offering during 2002.

Cash Requirements.     
We estimate that we require a minimum of approximately $500,000 and a maximum of approximately $1,500,000 to operate for
the next 12 months. The minimum of $500,000 is required for operating expenses. The maximum will be required, however,
if the Augustine Fund does not convert their promissory note of approximately $362,000 into Common Stock of the Company
and the preferred stock holder does not convert its principal balance of $500,000 and accrued dividends of $85,000 into
Common Stock of the Company. The Augustine Note was extended until May 4, 2003 and the Company expects them to extend it further.
Additionally, The Augustine Fund began converting some of its Note into Common Stock of the Company during the fourth quarter of 2002.
Approximately $12,000 was converted. The Company also expended $10,000 in January to waive the obligation to register the shares
underlying the shares of the preferred stock. However, the Company nevertheless plans on filing a Form SB-2 registration statement
during the second quarter of 2003 to register the common stock underlying the preferred stock.

Additionally, as of March 31, 2003, we held full title to 4 thoroughbred horses and ownership interests, ranging from 5% to 90%
in two thoroughbreds. We expect to generate approximately $150,000 to $300,000 in revenue from the sales of these horses.
This projection is based upon our historical performance to date. Specifically, we have pinhooked approximately 45 horses
since the inception of the Company.

To the extent we are unable to meet our operating expenses or matured notes payable, we may borrow funds from our president
Mr. Tilton or others, or we may attempt to raise capital from large institutional investment equity funds. Any funds generated
from sales of horses or from equity investments, if any, in our company that exceeds our operating expenses and debt repayments
will be used to purchase additional thoroughbred horses.

Change in
Number of Employees

We
may consider hiring additional employees in 2003 finances permitted, in the areas of
marketing and sales.

8

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ITEM 7.
FINANCIAL STATEMENTS.

The
financial statements of Thoroughbred Interests, Inc., including the notes thereto and the
report of independent accountants  thereon, commence at page F-1 of this Report.

ITEM 8.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

None.

PART III

ITEM 9.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.

(a)   The
following table sets forth the name, age and position with the Company of each officer
and director of the Company as of  the date of this report.

|Name                 | Age |  | Position
|-------------------- | --- |  | --------
|                     |     | 
|James D. Tilton, Jr. |     |  | 42      

JAMES
"JIM" D. TILTON, JR., has served as Chairman of our Board of Directors, Chief
Executive Officer, President, Secretary,  Treasurer and Sole Director since our
formation. Mr. Tilton has more than 16 years experience in the securities industry. From
1995-1996, he was stockbroker at Morgan Keegan. From 1997-1999, he worked independently
in the securities industry, specializing in  corporate finance/investment banking. Mr.
Tilton has been involved in the financing of private and public small growth companies.
Mr.  Tilton holds Series 7, Series 24, Series 63 and Series 65 licenses. He also holds a
license through the State of Kentucky to sell  insurance products. He has been inactive
since January 31, 1999 in order to devote his full attention to matters involving
Thoroughbred Interests, Inc. and TuneIn Media, Inc. Since January, 1999, Mr. Tilton has
also been TuneIn Media, Inc.s Chief  Executive Officer and President. TuneIn Media, Inc.
was an interactive media content provider with a network of integrated technology
business, and currently is a dormant company. He is the Chairman of its Board of
Directors, and holds a significant equity position  in it. Mr. Tilton has a B.A. in
Political Science with an emphasis in Accounting/Business from the University of
Louisville.

(b)  Other
significant employees:  None.

(c)  Family
Affiliations.  None.

(d)  Involvement
in certain legal proceedings.  None.

SECTION 16(A)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Pursuant
to Section 16 of the Exchange Act, the Companys Directors and executive officers and
beneficial owners of more than  10% of the Companys Common Stock are required to file
certain reports, within specified time periods, indicating their holdings of  and
transactions in the Common Stock and derivative securities. Based solely on a review of
such reports provided to the Company and  written representations from such persons
regarding the necessity to file such reports, the Company is not aware of any failures to
file reports or report transactions in a timely manner during the Companys fiscal year
ended December 31, 2000, except that Jim  Tilton filed a late Form 3.

9

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ITEM 10.
EXECUTIVE COMPENSATION.

EXECUTIVE
COMPENSATION

The
following table sets forth the compensation awarded to, earned by or paid to Mr. Tilton
from inception of our company  (March, 1999) through December 31, 2002. We had no other
officers during this period.

|Name and PrincipalPosition                                                     |  | Year |      | Salary ($) |  |   |         | Bonus ($) |  | Other AnnualCompensation |  | Long-TermCompensationAwards-SecuritiesUnderlyingOptions ($) |  
|------------------------------------------------------------------------------ |  | ---- | ---- | ---------- |  | - | ------- | --------- |  | ------------------------ |  | ----------------------------------------------------------- | -
|James D. Tilton, Jr Chairman of the Board,Chief Executive Officerand President |  |      | 1999 |            |  | $ | 0 (1)   |           |  |                          |  | $                                                           | 0
|                                                                               |  |     
|James D. Tilton, Jr Chairman of the Board,Chief Executive Officerand President |  |      | 2000 |            |  | $ | 90,000  |           |  |                          |  | $                                                           | 0
|                                                                               |  |     
|James D. Tilton, Jr Chairman of the Board,Chief Executive Officerand President |  |      | 2001 |            |  | $ | 120,000 |           |  |                          |  | $                                                           | 0
|                                                                               |  |     
|James D. Tilton, Jr Chairman of the Board,Chief Executive Officerand President |  |      | 2002 |            |  | $ | 180,000 |           |  |                          |  | $                                                           | 0

(1)  Mr. Tilton
has agreed to defer $135,000 of his salary indefinitely.

(2)  On January
3, 2000, Mr. Tilton was granted 3,000,000 incentive stock options pursuant to our
Millennium Stock Option Plan at an  exercise price of $0.11.

EMPLOYMENT AND
CONSULTING AGREEMENT

We
have an Employment Agreement with James D. Tilton which ended on December 31, 2002. The
Agreement provided for the payment of  an annual base salary of $90,000 for calendar year
2000, $120,000 for calendar year 2001 and $180,000 for calendar year 2002. The  Agreement
also provides for an annual incentive bonus equal based on our annual earnings before
income taxes, depreciation and  amortization. The Agreement provides for the one-time
grant pursuant to our Millennium Stock Option Plan on 3,000,000 incentive stock  options
to Mr. Tilton at 110% of the fair market value of our Common stock on the date of the
grant. The options are vested and  exercisable immediately. The Agreement further
provides for the payment of Mr. Tilton upon the discharge of Mr. Tilton without cause  or
the resignation of Mr. Tilton for "good cause," or as defined in the Agreement
of a lump sum equal to his annual base salary and  bonus.  A new employment agreement is
being prepared currently between Mr. Tilton and the Company.

Mr. Tilton also has an employment agreement with TuneIn Media, Inc., an
interactive media content provider with a network of integrated technology
business which currently is a dormant company, of which he is Chief Executive
Officer and Chairman of the Board of Directors.

10

---

Table of Contents

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

|Name and Address ofBeneficial Owner            | Number of Shares ofBeneficially Owned | Percentageof Class (1)
|---------------------------------------------- | ------------------------------------- | ----------------------
|James D. Tilton, Jr                            |                                       | 18,000,000            
|8702 Twin Ridge RoadLouisville, Kentucky 40242 |                                       | (2) (3)               
|                                               |                                      
|All Officers and                               |                                       | 18,000,000            
|Directors asa group (1 person)                 |                                       | (2) (3)               

(1)  Based upon
29,109,904 shares issued and outstanding as of December 31, 2002.

(2)  Includes
7,905,000 held by Joseph Stevens for a personal loan with a remaining principal balance
as of March 31, 2003 of $25,000  before agreed upon interest return of 15% and associated
expenses.  If Mr. Tilton is unable to repay  his stock loan in cash,  this may and has
caused some of the stock to be sold from time to time in the open market.

(3)  Includes
3,000,000 options to purchase 3,000,000 shares of the Companys Common Stock pursuant to
the Companys Millennium Stock  option Plan.  All of the options are vested.

ITEM 12.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

In
connection with our incorporation, we issued 12,000,000 shares of our common stock to Mr.
Tilton at the par value of $0.001  per share.  Mr. Tilton received these shares in
recognition of his pre-incorporation services.

In
connection with our incorporation, we issued 12,000,000 shares of our common stock to Mr.
Tilton at the par value of $0.001  per share.  Mr. Tilton received these shares in
recognition of his pre-incorporation services.

Subsequently,
due to our 2 for 1 stock split, Mr. Tiltons shares were increased to 24,000,000 shares.
7,905,000 of these  shares are being held in escrow in the name of Herb Sommer as
security for the certain Joseph Stevens stock loan previously described.

11

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Table of Contents

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

The
following Exhibits are filed herewith and made a part hereof.

|No. |  | Description                                                                      
|--- |  | ---------------------------------------------------------------------------------
|3.1 |  | Articles
of Incorporation of Thoroughbred  Interests, Inc., dated March 25, 1999*

|3.2 |  | By-Laws
of Thoroughbred Interests, Inc.*
|--- |  | ----------------------------------------

|4.1 |  | Promissory
Note dated September 30, 1999,  between Thoroughbred Interests, Inc. and  Augustine Fund,
L.P.*
|--- |  | ----------------------------------------------------------------------------------------------------------

|4.2 |  | Note
Extension Agreement between  Thoroughbred Interests, Inc. and Augustine  Fund, L.P. dated
March 22, 2000*
|--- |  | --------------------------------------------------------------------------------------------------------------

|4.3 |  | Note
Extension Agreement between  Thoroughbred Interests, Inc. and Augustine  Fund, L.P. dated
October 3, 2000*
|--- |  | ---------------------------------------------------------------------------------------------------------------

|4.4 |  | Amended
Promissory Note dated November 21,  2000, between Thoroughbred Interests, Inc.  and
Augustine Fund, L.P.*
|--- |  | -----------------------------------------------------------------------------------------------------------------

|4.5 |  | Note
Extension Agreement dated March 31,  2001, between Thoroughbred Interests, Inc.  and
Augustine Fund, L.P.**
|--- |  | ----------------------------------------------------------------------------------------------------------------

|4.6 |  | Promissory
Note dated December 15, 1999,  between Thoroughbred Interests, Inc. and Mr.  Andrew Dyer*
|--- |  | ----------------------------------------------------------------------------------------------------

|4.7 |  | Promissory
Note dated January 31, 2000,  between Thoroughbred Interests, Inc. and Mr.  Andrew Dyer*
|--- |  | ---------------------------------------------------------------------------------------------------

|4.8 |  | Note
Extension Agreement between  Thoroughbred Interests, Inc. and Mr. Andrew  Dyer, dated
October 11, 2000*
|--- |  | ------------------------------------------------------------------------------------------------------------

|4.9 |  | Amended
Promissory Note dated November 21,  2000, between Thoroughbred Interests, Inc.  and Mr.
Andrew Dyer*
|--- |  | ------------------------------------------------------------------------------------------------------------

|4.10 |  | Amended
Promissory Note dated November 21,  2000, between Thoroughbred Interests, Inc.  and Mr.
Andrew Dyer*
|---- |  | ------------------------------------------------------------------------------------------------------------

|4.11 |  | Note
Extension Agreement dated April 12,  2001, between Thoroughbred Interests, Inc.  and Mr.
Andrew Dyer
|---- |  | ---------------------------------------------------------------------------------------------------------

|4.12 |  | Secured
Promissory Note dated October 31,  2000, between James D. Tilton and  Thoroughbred
Interests, Inc.*
|---- |  | -----------------------------------------------------------------------------------------------------------

12

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Table of Contents

|4.13 |  | Amended
Secured Promissory Note dated April  12, 2001, between Thoroughbred Interests,  Inc. and
James D. Tilton*
|---- |  | -----------------------------------------------------------------------------------------------------------------

|10.1 |  | Indemnity
Agreement dated September 27,  1999, between James D. Tilton and  Thoroughbred Interests,
Inc.*
|---- |  | ---------------------------------------------------------------------------------------------------------

|10.2 |  | Stock
Escrow Agreement dated September 30,  1999, by and between James D. Tilton, The
Augustine Fund, and H. G. Bagwell*
|---- |  | ------------------------------------------------------------------------------------------------------------------------

|10.3 |  | Pledge
and Security Agreement dated  September 30, 1999 between James D. Tilton  and the
Augustine Fund, LP*
|---- |  | ------------------------------------------------------------------------------------------------------------

|10.4 |  | Thoroughbred
Interests, Inc. Millennium  Stock Option Plan*
|---- |  | -----------------------------------------------------------

|10.5 |  | Internet
Domain Name Purchase Agreement,  dated September 30, 2000*
|---- |  | -------------------------------------------------------------------

|10.6 |  | Employment
Agreement dated January 3, 2000  between James D. Tilton and Thoroughbred  Interests,
Inc.*
|---- |  | ------------------------------------------------------------------------------------------------------

|10.7 |  | Lease
Agreement dated November 11, 1999  between Goodshape LLC and Jim D. Tilton, Jr.*
|---- |  | --------------------------------------------------------------------------------------

|10.8 |  | Pledge
and Security Agreement dated October  31, 2000, between James D. Tilton and  Thoroughbred
Interests, Inc.*
|---- |  | -----------------------------------------------------------------------------------------------------------------

|23.1 |  | Consent of
Baum & Company, P.A.*
|---- |  | --------------------------------

|99.1 |  | Certification
of Chief Executive Officer
|---- |  | ----------------------------------------

|99.2 |  | Certification
of Chief Accounting Officer
|---- |  | -----------------------------------------

*  Incorporated
by reference to the Companys Form  10-SB, as amended, filed with the Securities and
Exchange Commission on July 5, 2000.

**  Incorporated
by reference to the Companys Form 10-KSB, filed with the Commission on April
22, 2003.

REPORTS ON FORM
8-K:  None

ITEM 14.
CONTROLS AND PROCEDURES.

As required by SEC rules, I have evaluated the effectiveness of the design
and operation of the Companys disclosure controls and procedures within 90 days
of the filing of this annual report. This evaluation was carried out under the
supervision and with the participation of our principal executive and financial
officer. Based on this evaluation, he has concluded that the design and
operation of the Companys disclosure controls and procedures are effective.
There were no significant changes to the Companys internal controls or in other
factors that could significantly affect internal controls subsequent to the date
of their evaluation.

Disclosure controls and procedures are the Companys controls and other
procedures that are designed to ensure that information required to be disclosed
by the Company in the reports that we file or submit under the Exchange Act is
recorded, processed, summarized and reported, within the time periods specified
in the SECs rules and forms. Disclosure controls and procedures include,
without limitation, controls and procedures designed to ensure that information
required to be disclosed by the Company in the reports that we file under the
Exchange Act is accumulated and communicated to the principal executive and
financial officer to allow timely decisions regarding required disclosure.

13

---

Table of Contents

SIGNATURES

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

|      |                                                                                                                                                          | THOROUGHBRED INTERESTS, INC.
|----- | -------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------
|      | Registrant                                                                                                                                              
|     
|Date: | June 13, 2003                                                                                                                                            |                             
|      | James D. Tilton
Chairman, President, Secretary and
Chief Executive Officer
(Principal Executive Officer and
Principal Financial and
 Accounting Officer)

In
accordance with the requirements of the Exchange Act, this report is signed
below by the following persons on behalf of the Registrant in the capacities and
on the dates indicated.

|Signature                                                                                                 | Title                                        | Date         
|--------------------------------------------------------------------------------------------------------- | -------------------------------------------- | -------------
|                                                                                                         
|/s/  James D. Tilton, JrJames D. Tilton, Jr.(Principal Executive Officer andPrincipal Accounting Officer) | ChairmanPresident andChief Executive Officer | June 13, 2003

14

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Table of Contents

# CERTIFICATION
PURSUANT TO18
U.S.C. SECTION 1350ADOPTED
PURSUANT TOSECTION 906
OF THE SARBANES-OXLEY ACT OF 2002

In
connection with the Annual Report of Thoroughbred Interests, Inc. (the
Company) on Form 10-KSB for the period ending December 31, 2002 as
filed with the Securities and Exchange Commission on the date hereof (the
Report), I, James D. Tilton, Chief Executive Officer of the Company,
certify, pursuant to Section 18 U.S.C. 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, that:

(1)
The Report fully complies with the requirements of Section 13(a) and 15(d) of
the Securities Exchange Act of 1934; and

(2)
The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.

/s/
James D. TiltonJames
D. TiltonChief Executive OfficerJune 13, 2003

15

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Table of Contents

Chief
Financial Officer Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, James D. Tilton, Chief Financial
Officer of Thoroughbred Interests, Inc., certify that:

|1. |  | I have reviewed this Annual Report on Form 10-KSB of Thoroughbred Interests,
               Inc. (the Registrant);
|-- |  | --------------------------------------------------------------------------------------------------------------------

|2. |  | Based on my knowledge, this annual report does not contain any untrue statement
               of a material fact or omit to state a material fact necessary to make the
               statements made, in light of the circumstances under which such statements were
               made, not misleading with respect to the period covered by this annual report;
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3. |  | Based on my knowledge, the financial statements, and other financial information
               included in this annual report, fairly present in all material respects the
               financial condition, results of operations and cash flows of the Registrant as
               of, and for, the periods presented in this annual report;
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4. |  | The Registrants other certifying officer and I are responsible for
               establishing and maintaining disclosure controls and procedures (as defined in
               Exchange Act Rules 13a-14 and 15d-14) for the Registrant and have:
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|a) |  | designed such disclosure controls and procedures to ensure that material
          information relating to the Registrant, including its consolidated subsidiaries,
          is made known to us by others within those entities, particularly during the
          period in which this annual report is being prepared;
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|b) |  | evaluated the effectiveness of the Registrants disclosure controls and
          procedures as of a date within 90 days prior to the filing date of this annual
          report (the Evaluation Date); and
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|c) |  | presented in this annual report our conclusions about the effectiveness of the
          disclosure controls and procedures based on our evaluation as of the Evaluation
          Date;
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|5. |  | The Registrants other certifying officer and I have disclosed, based on
               our most recent evaluation, to the Registrants auditors and the audit
               committee of Registrants board of directors:
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|a) |  | all significant deficiencies in the design or operation of internal controls
          which could adversely affect the Registrants ability to record, process,
          summarize and report financial data and have identified for the
          Registrants auditors any material weaknesses in internal controls; and
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|b) |  | any fraud, whether or not material, that involves management or other employees
          who have a significant role in the Registrants internal controls; and
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------

|6. |  | The Registrants other certifying officer and I have indicated in this
               annual report whether there were significant changes in internal controls or in
               other factors that could significantly affect internal controls subsequent to
               the date of our most recent evaluation, including any corrective actions with
               regard to significant deficiencies and material weaknesses.
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Date: | June 13, 2003                                                                                               |  | By: | /s/ James D. Tilton
|----- | ----------------------------------------------------------------------------------------------------------- |  | --- | -------------------
|      | James D. Tilton
Chairman of the Board, President, and
Chief Executive Officer
(Principal Executive Officer)

16

---

Table of Contents

Chief
Executive Officer Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, James D. Tilton, Chief Financial
Officer of Thoroughbred Interests, Inc., certify that:

|1. |  | I have reviewed this Annual Report on Form 10-KSB of Thoroughbred Interests,
               Inc. (the Registrant);
|-- |  | --------------------------------------------------------------------------------------------------------------------

|2. |  | Based on my knowledge, this annual report does not contain any untrue statement
               of a material fact or omit to state a material fact necessary to make the
               statements made, in light of the circumstances under which such statements were
               made, not misleading with respect to the period covered by this annual report;
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3. |  | Based on my knowledge, the financial statements, and other financial information
               included in this annual report, fairly present in all material respects the
               financial condition, results of operations and cash flows of the Registrant as
               of, and for, the periods presented in this annual report;
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4. |  | The Registrants other certifying officer and I are responsible for
               establishing and maintaining disclosure controls and procedures (as defined in
               Exchange Act Rules 13a-14 and 15d-14) for the Registrant and have:
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|a) |  | designed such disclosure controls and procedures to ensure that material
          information relating to the Registrant, including its consolidated subsidiaries,
          is made known to us by others within those entities, particularly during the
          period in which this annual report is being prepared;
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|b) |  | evaluated the effectiveness of the Registrants disclosure controls and
          procedures as of a date within 90 days prior to the filing date of this annual
          report (the Evaluation Date); and
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|c) |  | presented in this annual report our conclusions about the effectiveness of the
          disclosure controls and procedures based on our evaluation as of the Evaluation
          Date;
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|5. |  | The Registrants other certifying officer and I have disclosed, based on
               our most recent evaluation, to the Registrants auditors and the audit
               committee of Registrants board of directors:
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|a) |  | all significant deficiencies in the design or operation of internal controls
          which could adversely affect the Registrants ability to record, process,
          summarize and report financial data and have identified for the
          Registrants auditors any material weaknesses in internal controls; and
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|b) |  | any fraud, whether or not material, that involves management or other employees
          who have a significant role in the Registrants internal controls; and
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------

|6. |  | The Registrants other certifying officer and I have indicated in this
               annual report whether there were significant changes in internal controls or in
               other factors that could significantly affect internal controls subsequent to
               the date of our most recent evaluation, including any corrective actions with
               regard to significant deficiencies and material weaknesses.
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Date: | June 13, 2003                                                                                                |  | By: | /s/ James D. Tilton
|----- | ------------------------------------------------------------------------------------------------------------ |  | --- | -------------------
|      | James D. Tilton
Chairman of the Board, President, and
Chief Financial Officer
(Principal Accounting Officer)

17

---

Table of Contents

|THOROUGHBRED
INTEREST, INC.FINANCIAL STATEMENTSDECEMBER 31, 2002 AND 2001
|-------------------------------------------------------------------------

|                                                                        | PAGE
|----------------------------------------------------------------------- | ----
|INDEPENDENT AUDITORS REPORT                                            | F-2 
|                                                                       
|Balance Sheets as of December 31, 2002 and 2001                         | F-3 
|                                                                       
|Statements of Operations for the Years Ended December 31, 2002 and 2001 | F-4 
|                                                                       
|Statements of Changes in Stockholders Equity for the Years Ended       | F-5 
|December 31, 2002 and 2001                                              |     
|                                                                       
|Statements of Cash Flows for the Years Ended December 31, 2002 and 2001 | F-6 
|                                                                       
|Notes to Financial Statements                                           | F-7 

F-1

---

Table of Contents

# BAUM
& COMPANY, P.A.Certified Public Accountants1515 University Drive, Suite, 209Coral Springs, Florida 33071

# 

INDEPENDENT
AUDITORS REPORT

The
Board of Directors Thoroughbred Interests, Inc. Louisville, Kentucky

We
have audited the accompanying balance sheet of Thoroughbred Interests, Inc. as
of December 31, 2002and 2001 and the related statement of income, changes in
stockholders equity and cash flows for the years then. These financial
statements are the responsibility of the Companys management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

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

In
our opinion, the financial statements present fairly, in all material respects,
the financial position of Thoroughbred Interests, Inc. at December 31, 2002 and
2001 and the statement of operations, changes in stockholders equity and
cash flows for the years then ended, in conformity with accounting principles
generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 7 to the
financial statements the Companys dependence on outside financing, lack of
existing commitments from lenders to provide necessary financing and lack of
sufficient working capital raise substantial doubts about its ability to
continue as a going concern. Managements plans concerning these maters are also
described in Note 7. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.

/s/  Baum & Company,
P.A.

Coral
Springs, FloridaApril 10, 2003

F-2

---

Table of Contents

|THOROUGHBRED
INTEREST, INC.BALANCE SHEETSDECEMBER 31, 2002 AND 2001
|-------------------------------------------------------------------

|                                                                   | December 31,
|------------------------------------------------------------------ | ------------
|
|Assets:                                                            |             
|Current assets                                                     |             
|Cash                                                               |             
|Accounts receivable                                                |             
|Investment in thoroughbred horses                                  |             
|                                                                   |             
|                                                                   |             
|Other assets                                                       |             
|Loan Receivable - related party                                    |             
|                                                                   |             
|Total Assets                                                       |             
|                                                                   |             
|                                                                   |             
|Liabilities & Stockholders Equity:                                |             
|Current Liabilities                                                |             
|Bank overdraft                                                     |             
|Note payable (note 5)                                              |             
|Accounts payable and accrued expenses                              |             
|Accrued compensation - related party                               |             
|Accrued dividends                                                  |             
|                                                                   |             
|                                                                   |             
|Other liabilities                                                  |             
|Note payable - related party                                       |             
|                                                                   |             
|                                                                   |             
|Stockholders Equity:                                              |             
|Preferred stock, par value $0.001, 10,000 shares authorized, 5,000 |             
|and 0 shares issued in 2002 and 2001, respectively                 |             
|Common stock, par value $0.001, 100,000,000 shares authorized;     |             
|29,292,813 and 26,661,000 shares issued and outstanding            |             
|in 2002 and 2001, respectively                                     |             
|Additional paid-in capital                                         |             
|Accumulated deficit                                                |             
|                                                                   |             
|                                                                   |             
|                                                                   |             
|Total Liabilities & Stockholders Equity                           |             
|                                                                   |             

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

F-3

---

Table of Contents

|THOROUGHBRED
INTEREST, INC.STATEMENTS OF OPERATIONSFOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001
|-------------------------------------------------------------------------------------------------

|                                                     | 2002 |  | 2001 |           
|---------------------------------------------------- | ---- |  | ---- | ----------
|                                                     |      |  |      |           
|Revenues                                             |      |  | $    | 1,875,307 
|Revenues - related party                             |      |  |      | 97,000    
|                                                     |      |  |      |           
|                                                     |      |  |      | 1,972,307 
|Cost of horses sold                                  |      |  |      | 810,500   
|                                                     |      |  |      |           
|                                                     |      | 
|Gross profit                                         |      |  |      | 1,161,807 
|                                                     |      | 
|Operational expenses                                 |      |  |      | 844,124   
|General & administrative                             |      |  |      | 212,662   
|                                                     |      |  |      |           
|                                                     |      | 
|Total operating expenses                             |      |  |      | 1,056,786 
|                                                     |      |  |      |           
|                                                     |      | 
|Net income (loss) before other income and expense    |      |  |      | 105,021   
|                                                     |      |  |      |           
|                                                     |      | 
|Other income and expense                             |      | 
|Interest income                                      |      |  |      | 813       
|Interest expense                                     |      |  |      | (10,887   
|Interest expense - related party                     |      |  |      | (13,500   
|                                                     |      |  |      |           
|                                                     |      |  |      | (23,574   
|                                                     |      |  |      |           
|Net income (loss) before provision for income taxes  |      |  |      | 81,447    
|Provision for income taxes                           |      |  |      | -         
|                                                     |      |  |      |           
|Net income (loss)                                    |      |  | $    | 81,447    
|                                                     |      |  |      |           
|                                                     |      | 
|Net (loss) per common share - basic                  |      |  | $    | 0.00      
|Weighted average number of common shares outstanding |      |  |      | 28,094,236
|                                                     |      |  |      |           

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

F-4

---

Table of Contents

|THOROUGHBRED
INTEREST, INC.STATEMENT OF CHANGES IN STOCKHOLDERS EQUITY (DEFICIT)FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001
|-------------------------------------------------------------------------------------------------------------------------------

|                                |  |  |  |            | Total  
|------------------------------- |  |  |  | ---------- | -------
|                                | 
|                                |  |  |  |            | Paid-in
|                                |  |  |  | Shares     |        
|                                |  |  |  |            |        
|Balance - December 31, 2000     |  |  |  | 26,411,000 |        
|                                |  | 
|Common stock issued for         |  |  |  |            |        
|consulting fees                 |  |  |  | 250,000    |        
|Net loss                        |  |  |  | -          |        
|                                |  |  |  |            |        
|Balance - December 31, 2001     |  |  |  | 26,661,000 |        
|                                |  | 
|Redemption of note payable      |  |  |  | 1,238,600  |        
|Common stock issued for         |  |  |  |            |        
|underwriting fee                |  |  |  | 1,000,000  |        
|Preferred stock issued for cash |  |  |  | -          |        
|Common stock issued for         |  |  |  |            |        
|consulting fee                  |  |  |  | 2,000,000  |        
|Cancellation of common          |  |  |  |            |        
|stock issued for                |  |  |  |            |        
|consulting fees                 |  |  |  | (1,963,484 | )      
|Common stock issued for         |  |  |  |            |        
|debt conversion                 |  |  |  | 356,797    |        
|Net income                      |  |  |  | -          |        
|Dividends accrued               |  |  |  | -          |        
|                                |  |  |  |            |        
|Balance - December 31, 2002     |  |  |  | 29,292,813 |        
|                                |  |  |  |            |        

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

F-5

---

Table of Contents

|THOROUGHBRED
INTEREST, INC.STATEMENT OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001
|-------------------------------------------------------------------------------------------------

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | For the years ended December 31,
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------
|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                 
|Cash flows from operating activities:                                                                                                                                                                                                                                                                                                                                                                                                                               |                                 
|Net income (loss)                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                 
|Adjustments to reconcile net income (loss) to net cash provided by                                                                                                                                                                                                                                                                                                                                                                                                  |                                 
|operating activities:                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                 
|Common stock issued for interest expense                                                                                                                                                                                                                                                                                                                                                                                                                            |                                 
|Common stock issued for services                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                 
|Changes in operating assets and liabilities                                                                                                                                                                                                                                                                                                                                                                                                                        
|(Increase) in accounts receivable                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                 
|Increase (decrease) in investment in thoroughbred horses                                                                                                                                                                                                                                                                                                                                                                                                            |                                 
|(Decrease) in accrued compensation - related party                                                                                                                                                                                                                                                                                                                                                                                                                  |                                 
|(Decrease) in accounts payable and accrued expenses                                                                                                                                                                                                                                                                                                                                                                                                                 |                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                 
|Net cash provided (used) from operations                                                                                                                                                                                                                                                                                                                                                                                                                            |                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                 
|Cash flows from financing activities:                                                                                                                                                                                                                                                                                                                                                                                                                               |                                 
|(Increase) in deferred registration costs                                                                                                                                                                                                                                                                                                                                                                                                                           |                                 
|Increase (decrease) in note payable - related party                                                                                                                                                                                                                                                                                                                                                                                                                 |                                 
|(Increase) in Loan Receivable - related party                                                                                                                                                                                                                                                                                                                                                                                                                       |                                 
|Proceeds of sale of preferred stock                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                 
|Net cash provided (used) from financing activities                                                                                                                                                                                                                                                                                                                                                                                                                  |                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                 
|Net increase (decrease) in cash                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                 
|Cash - beginning                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                 
|Cash - ending                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                 
|Supplemental Disclosure of Cash Flow Information:                                                                                                                                                                                                                                                                                                                                                                                                                   |                                 
|Cash paid during the year for:                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Interest expense                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                 
|Taxes Paid                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                 
|Non-Cash
Transactions: a.) The Company issued 1,000,000 shares of common stock to satisfy a
$100,000 convertible note payable in March 2002. b.) The Company issued 356,797 shares of
common stock to reduce a  note payable by $12,100 in December 2002.c.)  The Company
issued 2,000,000 shares of Common Stock to satisfy an accrual of $20,000 for consulting fees
incurred in 2001.
The
accompanying notes are an integral part of these financial statements.

F-6

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Table of Contents

|THOROUGHBRED
INTEREST, INC.NOTES TO FINANCIAL STATEMENTSDECEMBER 31, 2002 AND 2001
|----------------------------------------------------------------------------------

NOTE
1  BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BUSINESS AND
ORGANIZATION

The
Company was organized under the laws of Nevada on March 25, 1999. The Company
business consists of purchasing, training and sales of thoroughbred horses. The
Company has emerged from its development stage in early 2000. The Company
incurred a deficit of $ 134,167 in its development stage.

ORGANIZATION
COSTS

The
Company has incurred various expenditures in the formation of its corporate and
organizational structure. In accordance with SOP 98-5 these costs will be
expensed as incurred.

REVENUE
RECOGNITION

Revenue
is recognized when thoroughbred horses are purchased for cash or approved credit
and title is transferred to the purchaser. The purchaser is responsible for
delivery and ultimate possession of the horses acquired.

DEFERRED
REGISTRATION COSTS

The Company has incurred various costs to prepare and file the required
documents for any future stock offering. These costs will be offset against the
proceeds of a successful offering, or expensed if unsuccessful. Registration
costs include legal, Accounting and out-of -pocket expenses applicable to future
stock offering.

INVESTMENT IN
THOROUGHBRED HORSES

The
Companys investment in thoroughbred horses are stated at the lower of cost
or market. Costs of maintaining horses and other direct horse related costs are
expensed in the period incurred.

MANAGEMENT
ESTIMATES

The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and revenues and expenses.
The actual outcome of the estimates could differ from the estimates made in the
preparation of the financial statements.

F-7

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Table of Contents

NOTE
1  BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 
CONTINUED

NET LOSS PER
COMMON SHARE

The  Company  reports  earnings  per share in  accordance  with SFAS No.  128, "
Earnings  per Share " Basic  earnings  per share is computed by dividing  income
(loss ) available  to common  stockholders  by the  weighted  average  number of
common shares available. Diluted earnings per share is computed similar to basic
earnings per share except the  denominator is increased to include the number of
additional  common  shares that would have been  outstanding.  If the  potential
common shares had been issued and if the additional common shares were dilutive.
The following potential common shares have been excluded from the computation of
diluted net loss per share for the periods  presented  because the effect  would
have been anti-dilutive.

|                                                                  | For the years ended December 31,
|----------------------------------------------------------------- | --------------------------------
|                                                                  | 2002                            
|Options outstanding under the Companys stock option plan         | 3,000,000                       
|Common stock issuable upon conversion of certain Notes Payable*   | 24,000,000                      
|Warrants issued in connection with Notes Payable                  | 2,375,000                       
|Common stock issuable upon conversion of                          |                                 
|Loans Payable - Related Party                                     | -                               
|Warrants issued in conjunction with Loan payable - related party  | -                               
|Common Stock issuable upon conversion of Preferred Stock          | 33,000,000                      
|                                                                  |                                 
|* Based upon 80% of closing bid price on April 16, 2003 of $0.019

NOTE
2  RELATED PARTY TRANSACTIONS

The Company has issued 24,000,000 shares of common stock to its founder at
a par value of $ .001 for his time and effort in establishing the Company.

The founder of the Company has assumed the role of CEO and Chairman of the
Board of Directors at a salary and a stock option plan subject to the approval
by the Board of Directors. The financial statements reflect $90,000 of accrued
compensation in accordance with the agreement to be paid upon sufficient cash
flow. The employment agreement commenced on January 3, 2000 for a three year
period ending December 31, 2002. The base salary under this agreement is as
follows: $ 90,000, $ 120,000 and $ 180,000 for the years 2000, 2001 and 2002,
respectively. The employment agreement has been deferred until the Company has
achieved sufficient cash flow to incur these expenditures. The CEO has
irrevocably elected to waiver his compensation. As of December 31, 2002 no
compensation is due under this agreement.

The agreement in addition to scheduled salary
increases also provides for
incentive bonuses in accordance with prescribed performance levels of the
Company. The incentives are based on annual earnings of the Company before
deduction of income taxes, depreciation and amortization ("EBIDA") The bonus
will be computed on annual base salary as detailed above at 30%, 50% and 100% of
base salary if the EBIDA reaches $ 1,000,000, $ 2,000,000 and $ 3,000,000
respectively.

In addition the CEO has received a grant of incentive
stock options pursuant to Companys Millennium Stock Option Plan of three million
shares of common stock.

F-8

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Table of Contents

NOTE
2  RELATED PARTY TRANSACTIONS  CONTINUED

The
CEO has advanced funds to the Company as a interest bearing 6% per annum secured loan
pursuant to a written promissory dated October 31, 2000. The loan is payable in full on
or before October 31, 2003. The security consists of certain horses held in inventory.
The loan is convertible into common stock ("Converted shares" ) of the Company at $ .10
per share and warrants exercisable into one-half the number of "converted shares" at $.15
per share.. As of December 31, 2002, the loan has been paid in full. The stock warrants
expire at the end of five years from the date of conversion of "converted shares". The
Company used the Black-Scholes model to determine the fair market value of these benefits
which is $ 0. There is no expense recognized for the conversion feature of the loan
payable due to the conversion price being equal to the fair value of the Companys common
stock.

The
Company commenced in April 2000 utilizing an office facility leased by the CEO on an
informal agreement at $2,638 per month to conduct its business operations. In review of
this transaction, the disclosures pursuant to FASB 13 is not required since the Company
has no legal commitment for future payment of rent at its option. The Company in the
normal course of its business operates in conjunction with its CEO in various business
dealings. In order to achieve certain economic savings, the Company has conducted itself
in certain horse related transactions such as boarding, training, insurance coverage in
the name of the CEO.  The Company had sales of horses to its CEO and President in 2002 of $97,000.

NOTE
3  CAPITAL TRANSACTIONS

a.)    

The Company at its inception issued 24,000,000 shares of common stock to its
founder. The services rendered by the founder were valued at the par value of
the stock issued and expensed as startup costs.

b.)    

The Company at its inception issued 2,300,000 shares to individuals for
services rendered. These services were valued at the par value of the stock
issued and expenses as startup costs.

c.)    

The Company issued 86,000 shares of common stock during March and April 1999
for $ 4,300 pursuant to Section 4(2) of the Securities Act of 1933, as amended.

d.)    

The Company by an unanimous consent in lieu of a special meeting of
Directors approved a two (2) for one (1) forward stock split for all shares
issued and outstanding effective July 23, 1999. The authorized shares of common
stock increased from 50,000,000 to 100,000,000 and the par value remained at
$.001 per share.

e.)    

The
issued 25,000 of common stock in November 2000 for a domain name. The stock was
valued at $.10 per share. The value of this domain name has been expensed in
2000.

F-9

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Table of Contents

f.)    

 The Company issued 250,000 shares of restricted common stock to for
consulting services on August 24, 2001 valued at $ .05.

g.)    

The Company issued 2,000,000 shares of restricted common stock for services
on February 11, 2002 which was valued at $20,000 and accrued in 2001. In April
2002 1,813,334 of the stock was returned.

h.)    

The Company converted a $100,000 note payable plus accrued interest of
approximately $23,500 into 1,238,350 of shares of common stock.

i.)    

 In April 2002 the Company issued 5,000 shares of preferred stock for
$500,000. The stock purchase agreement requires the Company to pay a preferred
stock dividend of $2.00 per share per month. As of December 31, 2002, the
Company is delinquent on the payment of these dividends. Preferred dividends of
$85,000 have been accrued as of December 31, 2002. On December 31, 2002, the
holder of the preferred stock has executed an agreement to extend the time for
the Company to file a SEC registration in order to convert the preferred shares
into shares of common stock. A fee of $10,000 was paid to the preferred stock
holder for his extension. The has determined by the Companys management and its
legal counsel no to be construed as a mandatory redeemable preferred stock, thus
only redeemable into common stock.

j.)    

In April 2002, in conjunction with the sale of preferred stock the Company
issued 1,000,000 shares of restricted common stock for investment banking
services.

k.)    

In December 2002, the Company issued 356,797 shares of common stock to the
Augustine Fund LP in the conversion of $12,100 of its note payable.

NOTE
4  STOCK OPTION PLAN

The
Board of Directors has approved The Millennium Stock Option Plan effective as of
January 3, 2000 to compensate executives, key management personnel and
consultants of the Company. The plan document has authorized a maximum of
10,000,000 shares of common stock to be optioned at an exercise price to be
determined by the Company. In the case of the incentive stock option the
exercise price shall not be less than 100% of the fair market value of the
shares on the date the option is granted. The stock options are exercisable no
sooner than six months nor more than ten years from the date it is granted. The
fair market value of common stock options granted will be reflected as
compensation issued.

A
summary of the status of the Companys stock option plan at December 31,
2002:

|                                 | Shares |  | WeightedAverageExercisePrice
|-------------------------------- | ------ |  | ----------------------------
|Outstanding at beginning of year |        |  |                             
|Granted                          |        |  |                             
|Exercised                        |        |  |                             
|Forfeited                        |        |  |                             
|                                 |        |  |                             
|Outstanding at end of year       |        |  |                             
|                                 |        |  |                             
|                                 |        | 
|                                 |        |  |                             
|Options exercisable at year-end  |        |  |                             
|                                 |        |  |                             

F-10

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Table of Contents

NOTE
4  STOCK OPTION PLAN, CONTINUED

The
Company has adopted only the disclosure provisions of SFAS No. 123,
Accounting for Stock-Based Compensation. It applies Accounting
Principles Bulletin (APB) Opinion No. 25. Accounting for Stock
Issued to Employees, and related interpretations in accounting for its
Stock Option Plan and does not recognize compensation expense for its Stock
Option Plan other than for restricted stock and options issued to outside third
parties. The weighted average remaining contractual life of options outstanding
issued under the Stock Option Plan is 9.75 years at December 31, 2002. No
compensation expense was recognized as a result of the issuance of stock options
during the years ended December 31, 2002 and 2001. For options granted during
the year ended December 31, 2000 where the exercise price equaled the stock
price at the date of the grant, the weighted-average fair value of such options
was $0.11 and the weighted-average exercise price of such options was $0.10. No
options were granted during the year ended December 31, 2002 where the exercise
price was greater than the stock price at the date of grant or where the
exercise price was less than the stock price at the date of the grant.

NOTE
5  NOTES PAYABLE

On September 30, 1999 pursuant to a written promissory note the Company was
loaned $300,000 from Augustine Fund, L.P. The note has no stated interest but
calls for the payment of $375,000 in (180) one hundred eighty days from
September 30, 1999. The Augustine Fund L.P. has the right to convert all or any
portion of the $375,000 into 3,750,000 shares of common stock (the "Converted
Shares ") at $0.10 per share and warrants exercisable into one-half the number
of Converted Shares (1,875,000 shares) at $0.15 per share. As security for this
loan, the President of the company placed in escrow 6,000,000 restricted shares
of common stock, which has since been released. On November 4, 2002 the
Augustine Fund, L.P. granted the company a 180 day extension and the Company
modified the terms of the Note to allow it to become convertible into common
stock at conversion price equal to 80% of the market price. In addition, the
extension calls for the accrual of interest on the unpaid balance of $375,000 at
18% per annum. As of December 31, 2002, the Augustine Fund L.P. elected to
convert $12,100 of its loan into 356,797 shares of common stock. The Company
expects the Augustine Fund to extend their Note and continue to convert it on
occasion.

December 15, 1999, pursuant to convertible promissory note the Company was
loaned $50,000 from Andrew Dyer (an individual). The note is unsecured and bears
interest at 12% per annum payable including interest on or before August 13,
2000. On February 10, 2000 the Company received an additional $50,000 under the
same terms. The promissory notes are both convertible into 500,000 shares of
common stock (the "Converted Shares") at $0.10 per share and warrants
exercisable into one-half the number of Converted Shares (250,000 shares ) at
$0.15 per share. The Company used the Black-Scholes model to determine the fair
value of these warrants which is $ 0. There is no expense recognized for the
conversion feature of these notes due to the conversion price being equal to the
fair value of the Companys common stock. The due date of the notes plus accrued
interest has been extended to December 31, 2002. The note has been subsequently
converted to 1,238,350 shares of common stock effective as of January1, 2002.

NOTE
6  INCOME TAXES

The Company accounts for income taxes using the asset and liability method.
Under this method, deferred tax assets and liabilities are recognized for the
future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases and operating loss and tax credit carryforwards. Deferred
tax assets and liabilities are measured using currently enacted tax rates. The
effect on deferred tax assets and liabilities of a change in the tax rates is
recognized in results of operations in the period that includes the enactment
date. Because of the uncertainty regarding the Companys future profitability,
the future tax benefit of its losses have been fully reserved for. Therefore, no
benefit for the net operating loss has been recorded in the accompanying
financial statements. The net operating losses of approximately $700,000 can
be carried forward fifteen years through 2017 to be offset against net income.

F-11

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Table of Contents

NOTE
7  GOING CONCERN

The Company has prepared its financial  statement assuming a going concern.  Due
to the  Companys  unsuccessful  attempts  to raise  sufficient  funding and its
previous  sustained  operating  losses has  reduced  its  working  capital to an
unacceptable  level to pursue  its  business  plan.  The  Company  has  received
extensions  of its  indebtedness  to the  Augustine  Fund L P in the past; it is
uncertain whether an additional  extension will be granted on May 4, 2003 for an
extended  time to  satisfy  its  obligation  of  $362,900.  The note  maker  has
expressed a willingness to convert its debt for shares of common stock recently,
but due to the uncertainty for the market of the Companys  stock,  there are no
assurances that this will be continued at this time. The Company anticipates the
filing of a stock  registration  in the near future and will  continue to pursue
venture capital.

NOTE
8  RESTATEMENT OF PRIOR PERIOD

The Company had elected in prior years to defer the various professional
fees and costs associated with filing a SEC registration statement. Management
has determined that that these costs should be written off due to the lack of
any significant raising of funds. The deferred registration costs of $160,853
were substantially incurred in the year ended December 31, 2001, thus the
financial statements for that year have been restated.

F-12

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