UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

(Mark One)

[X]  QUARTERLY  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE ACT
     OF 1934

                For the quarterly period ended September 30, 2003

[ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

             For the transition period from ________ to ___________.

                       Commission file number: 33-18143-D
                                _________________

                        PEAK ENTERTAINMENT HOLDINGS, INC.
             (Exact name of registrant as specified in its charter)

      NEVADA                                                 87-0449399
(State or other jurisdiction                   (IRS Employer Identification No.)
of incorporation or organization)

          Bagshaw Hall, Bagshaw Hill, Bakewell, Derbyshire, UK DE45 1DL
                    (Address of principal executive offices)

                                 44 1629 814555
                           (Issuer's telephone number)

                                _________________

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

As of November 18, 2003, the issuer had 21,190,760 shares of common stock
outstanding.

Transitional Small Business Disclosure Format (check one): Yes [  ]  No [X]
<PAGE>
                        PEAK ENTERTAINMENT HOLDINGS, INC.
                                AND SUBSIDIARIES

                                   FORM 10-QSB
                    FOR THE QUARTER ENDED SEPTEMBER 30, 2003

                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                                                        Page

<S>      <C>                                                                                             <C>
 PART I.  FINANCIAL INFORMATION

 Item 1. Financial Statements                                                                             3

         Consolidated Balance Sheets                                                                      3

         Consolidated Statements of Operations                                                            4

         Consolidated Statements of Comprehensive Loss                                                    5

         Consolidated Statements of Cash Flows                                                            6

         Notes to Consolidated Financial Statements                                                       7

Item 2.  Management's Discussion and Analysis of Financial Condition and
         Results of Operations                                                                           18

Item 3.  Controls and Procedures                                                                         22

PART II.  OTHER INFORMATION

Item 2.  Changes in Securities and Use of Proceeds                                                       23

Item 5.  Other Information                                                                               24

Item 6.  Exhibits and Reports on Form 8-K                                                                25

Signatures                                                                                               26
</TABLE>
                                       2
<PAGE>
                          PART I. FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
               PEAK ENTERTAINMENT HOLDINGS, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

                                                    December 31,    September 30,
                                                        2002            2003
                                                                     Unaudited
                                                     -----------    -----------
<S>                                                  <C>                 <C>
Current Assets

Cash and cash equivalents                            $     9,870         11,593
Accounts receivable                                       63,341        152,885
Inventories                                              238,058        264,072
Other current assets                                        --           89,133
                                                     ------------   ------------
Total current assets                                 $   311,269    $   517,683

Plant and equipment, net                                 136,538        208,000
Intangible assets, net of amortization                 1,984,159      1,988,855
                                                     ------------   ------------
                                                     $ 2,431,966    $ 2,714,538
                                                     ============   ============

Liabilities and  Stockholders' Equity/(Deficit)

Current Liabilities

Short term borrowings                                $   264,600        273,583
Advances from factor                                        --            2,239
Accounts payable                                         578,835      1,000,603
Stockholders' advances account                           894,193        848,092
License fees payable                                     300,000        451,432
Other accrued liabilities                                233,316        901,640
                                                     ------------   ------------
Total current liabilities                            $ 2,270,944    $ 3,477,589

Long Term Liabilities

License fees payable                                   1,200,000      1,088,838
Convertible debentures                                      --          556,910
                                                     ------------   ------------
Total long term liabilities                          $ 1,200,000    $ 1,645,748

Stockholders' Equity (deficit)

Common  stock,  par value $0.01 - 900,000,000
  and $0.001 - 900,000,000  shares
  authorized, 19,071,684 and
  21,190,760 issued and outstanding                  $    19,075         21,197
Additional paid in capital                               (19,072)       555,313
Retained earnings (deficit)                             (967,451)    (2,815,155)
Other comprehensive income                               (71,530)      (170,154)
                                                     ------------   ------------
Total stockholders' equity (deficit)                  (1,038,978)    (2,408,799)
                                                     ------------   ------------
                                                     $ 2,431,966    $ 2,714,538
                                                     ============   ============
</TABLE>

          See accompanying notes to consolidated financial statements.

                                       3
<PAGE>
               PEAK ENTERTAINMENT HOLDINGS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                         3 months ended   3 months ended   9 months ended   9 months ended
                                         September 30,    September 30,    September 30,    September 30,
                                            2002              2003            2002             2003
                                         -----------      -----------      -----------      -----------
<S>                                         <C>               <C>             <C>              <C>
Revenue
   Character related consumer products      119,374           95,115          119,374          425,307
   Licensing arrangements                      --             42,508             --             89,953
                                         -----------      -----------      -----------      -----------
Net revenue                                 119,374          137,623          119,374          515,260

Cost of Revenue
   Cost of goods sold                       129,236           34,056          129,236          228,011
                                         -----------      -----------      -----------      -----------
Total cost of revenue                       129,236           34,056          129,236          228,011

Gross profit                                 (9,862)         103,567           (9,862)         287,249

Operating expenses
   Selling, general and administrative      238,163          435,299          580,153        1,616,076
   Depreciation and amortisation             28,970           44,257           42,669          127,098
                                         -----------      -----------      -----------      -----------
Total operating expenses                    267,133          479,556          622,822        1,743,174
                                         -----------      -----------      -----------      -----------

Loss from operations                       (276,995)        (375,989)        (632,684)      (1,455,925)

Foreign exchange gain                       (76,659)          38,605           10,932           70,600

Interest expense                             (8,850)        (233,192)          (8,850)        (460,874)
                                         -----------      -----------      -----------      -----------
Net loss                                   (362,504)        (570,576)        (630,602)      (1,846,199)
                                         ===========      ===========      ===========      ===========


Basic and diluted net loss per share     $    0.019      $     0.027      $     0.033      $      0.09

Weighted average common shares
 outstanding                             19,071,684       21,190,760       19,071,684       20,321,395
                                         ===========      ===========      ===========      ===========
</TABLE>

          See accompanying notes to consolidated financial statements.

                                       4
<PAGE>
               PEAK ENTERTAINMENT HOLDINGS, INC. AND SUBSIDIARIES
                  CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                    3 months ended  3 months ended  9 months ended  9 months ended
                                    September 30,   September 30,   September 30,   September 30,
                                       2002            2003            2002            2003
                                    ----------      ----------      ----------      ----------
<S>                                  <C>             <C>             <C>           <C>
Net loss                             (362,504)       (570,576)       (630,602)     (1,846,199)

Cumulative translation adjustment     (35,020)        (37,271)        (25,520)       (100,126)
                                    ----------      ----------      ----------      ----------
Comprehensive loss                   (397,524)       (607,847)       (656,122)     (1,946,325)
                                    ==========      ==========      ==========      ==========
</TABLE>

See accompanying notes to consolidated financial statements.

                                       5
<PAGE>
               PEAK ENTERTAINMENT HOLDINGS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                                 Nine months ended September 30
                                                   --------------------------
                                                      2002            2003
                                                   -----------    -----------
<S>                                                 <C>           <C>
Cash flows from operating activities:

Net loss                                            $(630,602)   $(1,846,199)

Adjustments to reconcile net loss to net cash
  used in operating activities:

Depreciation                                            1,539          9,941
Amortization of intangible assets                      41,130        117,157
Foreign exchange gain                                 (10,932)       (70,600)
Amortisation of discount on debentures                   --          348,411

Changes in working capital:

Accounts receivable                                      --          (87,295)
Inventories                                          (183,735)       (17,556)
Other current assets                                  (22,668)       (89,133)
Accounts payable and other accrued liabilities        146,452      1,039,877
                                                   -----------    -----------
Net cash used in operating activities                (658,816)      (595,397)
                                                   ===========    ===========
Cash flows from investing activities:

Purchase of plant and equipment                      (116,925)       (76,552)
Purchase of intangibles                              (259,794)       (43,021)
                                                   -----------    -----------
Net cash used in investing activities                (376,719)      (119,573)
                                                   ===========    ===========
Cash flows from financing activities:

Short term borrowings, net                            234,210           (418)
Stockholders' advances account                        877,828        (77,872)
Advances from factor                                     --            2,239
Convertible debentures                                   --          785,000
                                                   -----------    -----------
Net cash provided from financing activities         1,112,038        708,949
                                                   ===========    ===========
Cumulative translation adjustment                     (38,426)         7,744
                                                   ===========    ===========
Increase in cash and cash equivalents                  38,077          1,723
Cash and cash equivalents, beginning of period           --            9,870
                                                   -----------    -----------
Cash and cash equivalents, end of period               38,077    $    11,593
                                                   ===========    ===========
Supplemental disclosure of cash flow information

Interest paid                                      $       15    $       666
                                                   ===========    ===========
Purchase of licenses through issuance of long
term liabilities                                   $1,400,000    $     8,336
                                                   ===========    ===========
Accounting for reserve acquisition                 $     --      $   208,500
                                                   ===========    ===========
</TABLE>
          See accompanying notes to consolidated financial statements.

                                       6
<PAGE>
               PEAK ENTERTAINMENT HOLDINGS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.   Description of Business and Future Prospects

     Peak Entertainment Holdings, Inc, formerly Peak Entertainment Ltd., was
     formed on November 20, 2001, an integrated media group focused on children.
     Its activities include the production of television entertainment,
     character licensing and consumer products development, including toy and
     gift manufacturing and distribution. Integration enables Peak Entertainment
     Holdings, Inc. to take a property from concept to consumer, in-house,
     controlling and coordinating broadcast, promotions and product launches
     (toys, apparel, video games, etc.) to build market momentum and worldwide
     brand quality.

     The accompanying financial statements have been prepared assuming that the
     Company will continue as a going concern. As explained below, the Company
     has sustained recurring operating losses and has a net capital deficiency
     as of September 30, 2003. On April 22, 2003, the Company completed a
     reverse acquisition with a public shell and has become a public company
     with access to the US capital markets. Immediately following the reverse
     acquisition, the Company issued $785,000 in convertible debentures and
     warrants to purchase 1,570,000 shares of the Company's common stock. The
     Company received $300,000 at the time of issuance of the debentures and
     warrants and has since received the balance.

     The Company has developed a business plan to increase revenue by
     capitalizing on its integrated media products. However, the Company must
     obtain funds from outside sources in fiscal 2003 to provide needed
     liquidity and successfully implement its business plan. Presently, the
     Company has no firm commitments from outside sources to provide these
     funds. These factors raise substantial doubt about the Company's ability to
     continue in existence. The financial statements do not contain any
     adjustments that might result from the outcome of this uncertainty. While
     the Company is optimistic that it can execute its revised business plan,
     there can be no assurance that:

     A.   Increased sales necessary to obtain profitability will materialize,
          and

     B.   The Company will be able to raise sufficient cash to fund the
          additional working capital requirements.

2.   Summary of Significant Accounting Policies

     (A)  Principals of Consolidation and Combination

          The accompanying combined financial statements include the accounts of
          Jusco Toys Ltd, Jusco UK Ltd, Wembley Sportsmaster Ltd and Cameo
          Collectables Ltd after elimination of inter-company transactions and
          balances. Jusco Toys Ltd, Jusco UK Ltd and Wembley Sportsmaster Ltd
          are wholly-owned subsidiaries of Peak Entertainment Holdings, Inc,
          which is owned by Wilfred and Paula Shorrocks. Cameo Collectables Ltd
          was formed on August 20, 2002 and is owned by Wilfred and Paula
          Shorrocks. The financial statements of Cameo Collectables Ltd have
          been combined with Peak Entertainment Holdings, Inc as both entities
          were under common control until February 7, 2003, when Peak
          Entertainment Holdings, Inc acquired the whole of the share capital in
          Cameo Collectables Ltd, by means of a share for share exchange.

                                       7
<PAGE>
               PEAK ENTERTAINMENT HOLDINGS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


2.   Summary of Significant Accounting Policies (continued)

     (B)  Interim Financial Information

          In the opinion of management, the interim financial information as of
          September 30, 2003 and for the nine months ended September 30, 2003
          and 2002 contains all adjustments, consisting only of normal recurring
          adjustments, necessary for a fair presentation of the results for such
          periods. Results for interim periods are not necessarily indicative of
          results to be expected for an entire year.

          The accompanying consolidated financial statements have been prepared
          in accordance with generally accepted accounting principles for
          interim financial information and with the instructions to Form 10-QSB
          and Article 10 of Regulation S-X. Certain information and footnote
          disclosures normally included in the consolidated financial statements
          prepared in accordance with generally accepted accounting principles
          have been condensed or omitted pursuant to such rules and regulations.
          These consolidated financial statements should be read in conjunction
          with the consolidated financial statements, and the notes thereto,
          included in the Company's Annual Report on Form 10-KSB for the year
          ended December 31, 2002.

     (C)  Risks and Uncertainties

          The entertainment/media industry is highly competitive. The Company
          competes with many companies, including larger, well capitalized
          companies that have significantly greater financial and other
          resources. The Company's success is dependent upon the appeal of its
          entertainment products. Consumer preferences with respect to
          entertainment products are continuously changing and are difficult to
          predict. Therefore, the Company's success will depend on its ability
          to redesign, restyle and extend the useful life of products and to
          develop, introduce and gain customer acceptance of new entertainment
          products. The Company's ability, or inability, to manage these risk
          factors could influence future financial and operating results.

                                       8
<PAGE>
               PEAK ENTERTAINMENT HOLDINGS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


2.   Summary of Significant Accounting Policies (continued)

     (D)  Revenue Recognition

          The Company generates revenues from three distinct sources; the
          license fees generated from the production of television
          entertainment, character licensing and sales of character related
          consumer products. Revenues from the production of television
          entertainment is recognized in accordance with Statement of Position
          00-2 "Accounting by Producers or Distributors of Film". Under this
          guidance, the Company recognizes revenue from the sale of television
          entertainment when all of the following conditions are met:

          A.   Persuasive evidence of a sale or licensing arrangement with a
               customer exists,

          B.   The television episode is complete and in accordance with the
               terms of the arrangement, has been delivered or is available for
               immediate and unconditional delivery,

          C.   The license period of the arrangement has begun and the customer
               can begin its exploitation, exhibition or sale, and

          D.   The arrangement fee is fixed or determinable.

          Revenue from character licensing arrangements is recognized over the
          life of the agreement. Revenue from the sale of character related
          consumer products is recognized at the time of shipment when title of
          the products passes to the customer. Amounts received in advance are
          recorded as unearned revenue until the earnings process is complete.

     (E) Intangible assets and amortization

         Intangible assets are stated at cost less accumulated
         amortization and any provision for impairment. Amortization is
         provided on intangible fixed assets over their expected useful
         lives as follows:

         Trade marks - 10 years

         Website development costs - 3 years

         Licensing rights are amortised on a straight line basis over the
         term of the agreement, which range from 3 years - 20 years.

         Web Site Development Costs

         In March 2000, EITF No. 00-02, Accounting for Website Development
         Costs, was issued which addresses how an entity should account
         for costs incurred in website development. EITF 00-02
         distinguishes between those costs incurred during the
         development, application and infrastructure development stage and
         those costs incurred during the operating stage. The Company
         expenses all costs incurred during the development and operating
         stages. The Company evaluates costs incurred during the
         applications and infrastructure development stage using the
         guidance in Statement of Position (SOP) 98-1, "Accounting for the
         Costs of Computer Software Developed or Obtained for Internal
         Use".

                                       9
<PAGE>

               PEAK ENTERTAINMENT HOLDINGS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


2.   Summary of Significant Accounting Policies (continued)

     (F) Plant and equipment

         Plant and equipment are stated at cost, net of accumulated
         depreciation. Depreciation is provided on plant and equipment
         over their expected useful lives as follows:

         Fixtures & fittings - 10 years
         Moulds and Tooling - 5 years
         Computer equipment - 4 years

          Costs associated with the repair and maintenance of plant and
          equipment are expensed as incurred.

     (G) Film and television costs

         The Company capitalizes the costs of developing film and television
         projects in accordance with Statement of Position 00-2 "Accounting by
         Producers or Distributors of Film". These costs will be amortized
         using the individual-film-forecast-computation method, which amortizes
         costs in the same ratio that current period actual revenue bears to
         estimated remaining unrecognized ultimate revenue at the beginning of
         the current fiscal year. The Company has recorded no amortization to
         date as revenue has yet to be recognized.

     (H)  Asset Impairment

          The Company periodically evaluates the carrying value of long-lived
          assets when events and circumstances warrant such a review. The
          carrying value of a long-lived asset is considered impaired when the
          anticipated undiscounted cash flow from such asset is separately
          identifiable and is less than the carrying value. In that event, a
          loss is recognized based on the amount by which the carrying value
          exceeds the fair market value of the long-lived asset. Fair market
          value is determined primarily using the anticipated cash flows
          discounted at a rate commensurate with the risk involved.

     (I)  Cash Equivalents

          For purposes of the statements of cash flows, all temporary
          investments purchased with a maturity of three months or less are
          considered to be cash equivalents.

     (J)  Inventories

          Inventory is valued at the lower of cost or market, with cost being
          determined on the first-in, first-out basis. The Company reviews the
          book value of slow-moving items, discounted product lines and
          individual products to determine if these items are properly valued.
          The Company identifies these items and assesses the ability to dispose
          of them at a price greater than cost. If it is determined that cost is
          less than market value, then cost is used for inventory valuation. If
          market value is less than cost, then the Company establishes a reserve
          for the amount required to value the inventory at market. It the
          Company is not able to achieve its expectations of the net realizable
          value of the inventory at its current value, the Company adjusts its
          reserve accordingly. Inventory is comprised entirely of finished
          goods.

                                       10
<PAGE>
               PEAK ENTERTAINMENT HOLDINGS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


2.   Summary of Significant Accounting Policies (continued)

     (K)  Advertising costs

          Advertising costs, included in selling, general and administrative
          expenses, are expensed as incurred and were nil for the three months
          and nine months ended September 30, 2002 and $23,459 and $30,922 for
          the three and nine months ended September 30, 2003, respectively.

     (L)  Foreign currencies

          The Company uses the British Pound as its functional currency.
          Transactions denominated in foreign currencies are translated at the
          year-end rate with any differences recorded as foreign currency
          transaction gains and losses and are included in the determination of
          net income or loss. The Company has translated the financial
          statements into US Dollars. Accordingly, assets and liabilities are
          translated using the exchange rate in effect at the balance sheet
          date, while income and expenses are translated using average rates.
          Translation adjustments are reported as a separate component of
          stockholders' equity.

     (M)  Income taxes

          Income taxes are provided based on the liability method of accounting
          pursuant to Statement of Financial Accounting Standards No 109
          "Accounting for Income Taxes" ("SFAS 109"). In accordance with SFAS No
          109, deferred tax assets are recognised for deductible temporary
          differences and operating loss carry forwards, and deferred tax
          liabilities are recognised for taxable temporary differences.
          Temporary differences are the differences between the reported amounts
          of assets and liabilities and their tax basis. Deferred tax assets are
          reduced by a valuation allowance when, in the opinion of management,
          it is more likely than not that some portion or all of the deferred
          tax assets will not be realized.

     (N)  Use of Estimates

          The preparation of financial statements in conformity with accounting
          principles generally accepted in the United States of America requires
          management to make estimates and assumptions that affect the reported
          amounts of assets and liabilities and disclosure of contingent assets
          and liabilities at the date of the financial statements and the
          reported amounts of revenues and expenses during the reported period.
          Actual results could differ from such estimates.


                                       11
<PAGE>
               PEAK ENTERTAINMENT HOLDINGS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


2.   Summary of Significant Accounting Policies (continued)

     (O)  Earnings Per Share

          Earnings per share is based on the weighted average number of shares
          of common stock and dilutive common stock equivalents outstanding.
          Basic earnings per share includes no dilution and is computed by
          dividing income available to common shareholders by the weighted
          average number of common shares outstanding for the period. Diluted
          earnings per share reflects the potential dilution of securities that
          could share in the earnings of an entity.

          For the purposes of calculating earnings per share at December 31,
          2002 the Company has retroactively restated its outstanding common
          stock based upon the stock split declared on April 22, 2003 (See Note
          10).

          Basic and diluted earnings per share are the same during quarters
          ended September 30, 2002 and 2003 as the impact of dilutive securities
          is antidilutive. There are 2,215,000 warrants to purchase shares of
          the Company's Common stock currently outstanding.

     (P)  Recent Accounting Pronouncements

          In June 2002, the FASB issued Statements No 146, "Accounting for Costs
          Associated with Exit or disposal Activities". The standard requires
          companies to recognize costs associated with exit or disposal
          activities when they are incurred rather than at the date of
          commitment to an exit or disposal plan. Examples of costs covered by
          the standard include lease termination cost and certain employee
          severance costs that are associated with a restructuring, discontinued
          operation, plant closing, or other exit or disposal activity. Previous
          accounting guidance provided by EITF Issue No. 94-3, "Liability
          Recognition for Certain Employee Termination Benefits and Other Costs
          to Exit an Activity (including Certain Costs Incurred in a
          Restructuring)" is replaced by this Statement. Statement 146 is to be
          applied prospectively to exit or disposal activities initiated after
          December 31, 2002. The Company adopted this Statement on January 1,
          2003 and the adoption had no affect on the Company's financial
          statements for the period ended June 30, 2003.

          In April 2003, the FASB issued Statement No. 149, "Amendment of
          Statement 133 on Derivative Instruments and Hedging Activities". The
          Statement amends Statement 133 for decisions made by the Derivatives
          Implementation Group, in particular the meaning of an initial net
          investment, the meaning of underlying and the characteristics of a
          derivative that contains financing components. Presently, the Company
          has no derivative financial instruments and, therefore, believes that
          adoption of the Statement will have no effect on its financial
          statements.

          In May 2003, the FASB issued Statement No. 150 "Accounting for Certain
          Financial Instruments with Characteristics of both Liabilities and
          Equity". The Statement requires that the issuer classify certain
          instruments as liabilities, rather than equity, or so-called mezzanine
          equity. Presently, the Company has no financial instruments that come
          under the scope of the Statement and, therefore, believe that adoption
          of the new Statement will have no impact on its financial statements.

                                       12
<PAGE>
               PEAK ENTERTAINMENT HOLDINGS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


3.   Plant and Equipment

     Plant and equipment comprise the following at September 30, 2003.

           Fixtures and fittings                               64,695
           Moulds and tooling                                 117,613
           Computer equipment                                  38,812
                                                              -------
                                                              221,120
           Accumulated depreciation                            13,120
                                                              -------
                                                              208,000
                                                              =======

     The Company is not currently using or depreciating the moulds and tooling
     acquired from the acquisition of Jusco Toys Ltd, due to the enquiry from
     the Hong Kong Inland Revenue Department. These moulds and tooling will be
     utilized once the enquiry has been settled and management believes that no
     impairment has occurred. The Company owns other moulds and tooling included
     above that has a cost of $31,371, which it is currently using and hence
     depreciating.

4.   Intangible Assets

                                                     Accumulated
                                          Cost       amortization     Total

           Licences                      1,860,544     168,427      1,692,117
           Trademarks                      118,237       5,492        112,745
           Film and television costs       166,847        --          166,847
           Website costs                    21,572       4,426         17,146
                                         ---------   ---------      ---------
                                         2,167,200     178,345      1,988,855
                                         =========   =========      =========

     As of December 31, 2002, the estimated aggregate amortization expense,
     based on current levels of intangible assets for the succeeding five years
     is as follows:

                                                  $
           December 31, 2003                           155,893
           December 31, 2004                           156,366
           December 31, 2005                           145,809
           December 31, 2006                            91,943
           December 31, 2007                            91,943

                                       13
<PAGE>
               PEAK ENTERTAINMENT HOLDINGS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


5.   Short Term Borrowings

     On July 10, 2002, the Company borrowed $240,000 from an individual lender.
     The debt bears interest at 20% per year. The debt and all accrued interest
     was due on January 10, 2003. The debt is collateralized by the Company's
     inventory.

6.   Advances from Factor

     On January 13, 2003 Peak Entertainment Holdings, Inc entered into an
     invoice factoring agreement with IFT London Ltd. Under the agreement, the
     Company specifically identifies receivables that it wants to receive
     advances on and submits them to the factor. Once the factor approves the
     receivables that are submitted, the Company receives 70% of the invoice
     amount. Customers are then instructed to pay the factor directly. When the
     customer pays the entire outstanding balance to the factor, the Company
     receives the remaining 30% of the invoice amount, less a financing charge
     equal to 8% of the total invoice amount.

     The Company accounts for this arrangement in accordance with Statement of
     Financial Accounting Standard No. 140 "Accounting for Transfers and
     Servicing of Financial Assets and Extinguishments of Liabilities." Under
     the agreement any invoices not paid prior to the end of the recourse
     periods are reassigned to the Company. Accordingly, the Company records the
     advances received as a liability until the customer invoice is paid in
     full. In addition, the Company recognizes the interest charge in full at
     the time the initial advance is received.

7.   Commitments

     The Company leases certain buildings under non-cancellable operating
     leases. Future minimum lease payments under those leases are as follows at
     September 30, 2003.

     Year ending December 31, 2003                                $56,124
                                                                  =======

     Rent expense for all operating leases charged against earnings amounted to
     $14,232 and $44,571 in the three months and nine months ended September 30,
     2003 respectively and $15,904 and $41,193 in the three months and nine
     months ended September 30, 2002.

                                       14
<PAGE>
               PEAK ENTERTAINMENT HOLDINGS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


8.   Transactions with related parties

     The relationship between the Company and its related parties are:

          Wilfred and Paula Shorrocks are deemed to be related parties as they
          are directors and shareholders of the following companies: Jusco UK
          Ltd, Jusco Toys Ltd, Wembley Sportsmaster Ltd, Cameo Collectables Ltd
          and Peak Entertainment Holdings, Inc.

     During the six months the Company had the following transactions with its
     related parties:

          a)   Wilfred and Paula Shorrocks
<TABLE>
<CAPTION>

                    i) Movements on stockholders' advances account

                       <S>                                                         <C>
                       Balance due by the Company December 31, 2002                  $894,193
                       Cash repayments                                               (115,366)
                       Foreign exchange loss                                           69,265
                                                                                     ---------
                       Balance due by the Company at September 30, 2003              $848,092
                                                                                     =========
</TABLE>
                       There are no terms for repayment and no interest has been
                       charged to the Company during the period.

                   ii) License agreement

                       On April 30, 2002 the Company entered into a license
                       agreement with Wilfred and Paula Shorrocks whereby the
                       Company acquired the exclusive rights to apply various
                       intellectual properties to the manufacture, distribution
                       and sale of products on a worldwide basis. Under the
                       terms of the agreement the Company has undertaken to pay
                       to Wilfred and Paula Shorrocks a guaranteed minimum
                       royalties amount of US $1,000,000, with the agreement due
                       to expire on December 31, 2023. There are no set
                       repayment terms. This liability is included in unearned
                       royalties and other advances.

9.   Warrants

     On February 28, 2002, Palladium, the predecessor to Peak Entertainment
     Holdings, Inc issued warrants to purchase 645,000 shares of the Company's
     common stock at $0.31 per share. The warrants are for a term of 5 years and
     expire on February 28, 2007. On April 22, 2003 Peak Entertainment Holdings,
     Inc. issued warrants to purchase 1,570,000 shares of the Company's common
     stock at $0.31 per share. The warrants are for a term of 5 years and expire
     on April 22, 2008. These warrants are still outstanding as of September 30,
     2003, and can be exercised to purchase shares of Peak Entertainment
     Holdings, Inc.

     In July 2003, pursuant to a consulting agreement with POW! Entertainment
     LLC and Stan Lee, the Company issued to POW warrants to purchase 750,000
     shares of the Company's common stock, exercisable for five years at $0.35
     per share. Warrants to purchase 375,000 shares vested upon execution of the
     consulting agreement, and the remaining warrants to purchase the remaining
     375,000 shares are to vest after one year. After one year, POW has the
     right to demand registration of the shares of common stock underlying the
     warrant at the Company's expense.

                                       15
<PAGE>

               PEAK ENTERTAINMENT HOLDINGS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


9.   Warrants (Continued)

     In July 2003, pursuant to a consulting agreement with Jack Kuessous, the
     Company issued to Kuessous warrants to purchase 240,000 shares of common
     stock, exercisable for three years at $1.20 per share. Kuessous advanced
     $100,000 to the Company. The Company is negotiating with Kuessous the terms
     of repayment of the advance through an issuance of shares of the Company's
     common stock and an exchange of the warrants issued to Kuessous for
     warrants exercisable at a different exercise price.

10.  Reverse Acquisition

     On April 22, 2003, Palladium Communications, Inc. ("Palladium") (a US
     public company) issued 19,071,684 shares of its common stock for all of the
     outstanding common stock of Peak Entertainment Holdings, Inc. Immediately
     prior to the transaction, Peak Entertainment Holdings, Inc authorized a
     stock split so that the outstanding shares of common stock were increased
     from 4 to 19,071,684. Immediately after the transaction, the shareholders
     of Peak Entertainment Holdings, Inc (Wilf and Paula Shorrocks) owned
     approximately 90% of the outstanding common stock of Palladium. On April
     27, 2003, Palladium transferred all of its assets and liabilities,
     excluding the ownership of Peak Entertainment Ltd to Polladium Consulting
     Group, LLC. Therefore at the time of the acquisition Palladium was
     considered to be public shell. This transaction was accounted for as a
     reverse acquisition of a public shell.

     The accounting for a reverse acquisition with a public shell is considered
     to be a capital transaction rather than a business combination. That is,
     the transaction is equivalent to the issuance of common stock by Peak for
     the net monetary assets of Palladium, accompanied by a recapitalization.
     Palladium's net assets have been recorded at carryover basis and no
     goodwill has been generated in the transaction. The historical financial
     statements of the "registrant" became those of Peak Entertainment Holdings,
     Inc.

     Balance Sheet Adjustments

     The following is a summary of the adjustments to effect the
     recapitalization:
<TABLE>
<CAPTION>
                                                                   Additional                 Other
                  Stockholders' Equity                  Common       Paid In     Retained     Comprehensive
                                           Shares       Stock        Capital     Earnings     Income             Total
                                         ----------   ----------   ----------   -----------   -------------   -----------
<S>                          <C>         <C>              <C>          <C>        <C>              <C>          <C>
                  Peak Entertainment
                  Holdings Inc - April
                  22, 2003                        2   $        6   $        0   -$1,346,875        -$42,096   -$1,388,965
                  Stock split(1)         19,071,682       19,072      -19,072          --                            --
                                         ----------   ----------   ----------   -----------   -------------   -----------
                  Subtotal               19,071,684       19,078      -19,072    -1,346,875         -42,096    -1,388,965
                  Palladium
                  Communications, Inc.
                  - Net assets on April
                  22, 2003 (2)

                                          2,119,076        2,119     -210,619         --              --         -208,500
                                         ----------   ----------   ----------   -----------   -------------   -----------
                  Total stockholder      21,190,760   $   21,197    -$229,691   -$1,346,875        -$42,096   -$1,597,465
                  Equity immediately
                  after the
                  recapitalization

</TABLE>
                                       16
<PAGE>
               PEAK ENTERTAINMENT HOLDINGS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


10.  Reverse Acquisition

     In order to effect the merger, the following transactions were recorded:

     1.   Peak Entertainment Holdings, Inc completed a 9,535,842 for 1 stock
          split. This transaction has no impact on total stockholders' equity.

     2.   The net deficit of Palladium, $208,500, at the time of transaction is
          included in stockholders' equity. The other side of this transaction
          is to add $208,500 in liabilities related to convertible debentures to
          the historical financial statements of Peak Entertainment Holdings,
          Inc.

     On April 22, 2003, immediately following the recapitalization, to obtain
     funding for ongoing operations reverse acquisition, the Company issued
     $785,000 in convertible debentures and warrants to purchase 1,570,000
     shares of the Company's common stock.

     The debentures bear interest at 12%, mature one year from the date of
     issuance and are convertible at the option of the holder at the lower of
     $1.00 or 50% off the average of the three lowest intra-day trading prices
     for the common stock on a principal market for the 20 trading days before
     but not including the conversion date. The warrants are exercisable at the
     average of the three lowest trading prices of the common stock during the
     20 trading days immediately prior to the date of filing of a registration
     statement.

     The Company has recorded these debentures and warrants in accordance with
     the provisions of EITE 00-27 "Application of Issue 98-5 to Certain
     Convertible Instruments". Under the provisions of EITF 00-27, the Company
     has allocated the total proceeds received between the convertible
     debentures and the warrants based on their relative fair value at the date
     of issuance. The Company then estimated the intrinsic value of the
     beneficial conversion feature resulting from the ability of the debenture
     holders to convert at a 50% discount. As a result, the Company has recorded
     a debt discount of $785,000. The debt discount will be amortized as
     interest expense over the life of the debentures, which is one year.

11.  Contingent Liabilities

     The Company is presently under enquiry from the Hong Kong Inland Revenue
     Department. At this point in time, management believes that this enquiry
     will not have a material adverse impact on the Company's financial
     condition or results of operations.

                                       17
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

RESULT OF OPERATIONS

THREE MONTHS ENDED SEPTEMBER 30, 2003 AS COMPARED TO THREE MONTHS ENDED
SEPTEMBER 30, 2002.

Revenues for the three months ended September 30, 2003 were $137,623, a 15%
increase over prior year revenues of $119,374. This increase resulted mainly
from the sale of our gift related products `Countin Sheep' and `Kewpie Dolls'.
Also included within the increased revenue figure is the apportionment of
licenses signed that are accounted for in line with the term of the contract. At
the same time last year the Company sold only stock that he acquired through a
third party.

Gross profits as a percentage of revenue for the three months ended September
30, 2003 was 75% compared to a loss of $9,862 of the same period the previous
year.

Selling, general and administrative expenses for the Company increased by 11% to
$435,299 for the three month period ending September 30, 2003 compared to
$238,163 for the three months ended September 30, 2002.

Operating loss for the three months ended September 30, 2003 was $375,989 as
compared to an operating loss of $276,995 for the three months ended September
30, 2002. This decrease is primarily due to the decrease in the cost of revenue.

Interest expense by the Company for the three months ended September 30, 2003
increased to $233,192 from $8,850 for the three months ended September 30, 2002.
This is due mainly to the interest that is presentable upon the debentures.

The net loss for the three months ended September 30, 2003 was $570,576 as
compared to net loss of $362,504 for the three months ended September 30, 2002.
This loss increase for this period is mainly due to the increased legal and
professional fees and the interest that is payable on the debentures following
the entering of a Securities Purchase Agreement.

Basic and diluted loss per share for the three months ended September 30, 2003
were $0.027 compared to loss per share of $0.019 for the same period last year.
Earnings per share were calculated based on the weighted average number of
common shares as of September 30, 2003 of 21,190,760 and September 30, 2002 of
19,071,684.

The Company has not generated significant revenues in this period as expected
due to the forecasted investment in the TV shows to activate our exploitation of
the intellectual rights portfolio being delayed and as such the ability to
convert current negotiations to executed contracts has not been possible.

Further, we have delayed the production of the associated toys and merchandise
for the TV shows and this has also compromised our ability to generate sales in
these areas. We have been able to gradually increase our gross profit from the
last quarter of this year and slightly decrease our overheads. Even though our
employee overhead has increased with appointments of key personnel significantly
in the set up of an in-house CG team with three Animation Designers now in place
compared to 2002.

This strategic move increases the control of our projects and it is intended
that the investment will be recouped with savings from outsourcing to third
parties. There is though a continued reduction in the operational overheads of
the business that is improving the gross profitability of the Company each
quarter through 2003.

This has been achieved by close management controls and a recognition that the
business will operate within the limits of the current reduced revenues
generated until the investment in the TV shows has been realised.

                                       18
<PAGE>
The significant costs incurred in acquiring the IP rights and the legal and
professional costs associated with the public company and funding should be
considered as a major factor in these early accounts.


NINE MONTHS ENDED SEPTEMBER 30, 2003 AS COMPARED TO NINE MONTHS ENDED SEPTEMBER
30, 2002.

Revenues for the nine months ended September 30, 2003 were $515,260, a 331%
increase over prior year revenues of $119,374. This increase resulted mainly
from the sale of our gift related products and apportionment of licenses signed
in line with the term of the contracts, where as only the sale of consumer
products was generated for the same period to September 30, 2003.

Gross profits as a percentage of revenue for the nine months ended September 30,
2003 was 55.74%, as compared to the a loss of $9862 for the same period ended
September 30, 2003.

Selling, general and administrative expenses have increased 178.5% to $1,616,076
for the nine month period ended September 30, 2003 as compared to $580,153 for
the same period last year. This increase relates to primarily the increased
legal and professional costs associated with being a public company.

Operating loss for the nine months ended September 30, 2003 was $1,455,925 as
compared to an operating loss of $632,684 for the nine months ended September
30, 2002.

Interest expense for the Company for the nine months ended September 30, 2003
increased to $460,874 from $8,850 for the nine months ended September 30, 2002.
This increase in interest expense is mainly attributable to the amount of
interest that is payable upon the debentures following the culmination of the
Securities Purchase Agreement.

The net loss for the nine months ended September 30, 2003 was $1,846,199 as
compared to net loss of $630,602 for the nine months ended September 30, 2002.
This loss for the period is attributable to the increase in costs and interest
payable all in relation to the reverse merger into a US Shell Company and the
ongoing guidance and advice that is required for the filing of Statements at the
Securities Exchange Commission.

Basic and diluted loss per share for the nine months ended September 30, 2003
were $0.09 compared to loss of $0.033 for the same period last year. Earnings
per share were calculated based on the weighted average number of common shares
as of September 30, 2003 of 20,321,395 and September 30, 2002 of 19,071,684.


LIQUIDITY AND CAPITAL RESOURCES

The Company had a negative net change in cash of $1,723 for the nine months
ended September 30, 2003, compared to $38,077 for the period 30 September 2002.

Cash has been used in operating activities, the purchase of new equipment,
intangibles and repaying stockholders advances. The issue of convertible
debentures has generated inflows.

It is necessary for the Company to necessary for us to obtain additional cash
infusion from an outside source to allow us to move forward with the Company's
operations and proposed new products.

The Company believes that its future growth is dependent on the degree of
success of current operations in generating revenues, the ability to resolve the
Company's obligations under the contractual terms of the Company's existing
debts, and the ability to obtain additional funding for the Company's
operations.

The Company needs additional cash for its working capital purposes and to reduce
or resolve existing debt obligations. If the Company's does not resolve issues
and contractual obligations on existing debts, and if the creditors elect to
foreclose on existing debts, which is likely to occur, the Company will not have
sufficient funds to operate.

                                       19
<PAGE>
The primary issues management will focus on in the immediate future to address
this matter include:

     -    initiating negotiations to secure short term financing through
          promissory notes or other debt instruments on an as needed basis;

     -    working with the holders of convertible debentures on a restructuring
          of the debt they hold, by means of extension of maturity dates,
          modifying repayment terms, exchange of debentures to other forms of
          debts or otherwise, which would ease the Company's debt burden and
          allow for the raising of additional capital.

The Company is at present investigating new investment opportunities to allow
the Company to move forward and use cash to invest in animation, which in turn
will generate significant cash inflows from Licensing opportunities.


CRITICAL ACCOUNTING POLICIES

We have identified the policies below as critical to our business operations and
the understanding of our results of operations. The impact and any associated
risks related to these policies on our business operations is discussed
throughout Management's Plan of Operations where such policies reflect our
reported and expected financial results. For a detailed discussion on the
application of these and other accounting policies, see Note 2 in the Notes to
the Consolidated Financial Statements in Item 7 of the Annual Report of Form
10-KSB as of December 31, 2002. The preparation of this Quarterly Report on Form
10-QSB requires us to make estimates and assumptions that affect the reported
amount of assets and liabilities, disclosure of contingent assets and
liabilities at the date of our financial statements, and the reported amounts of
revenue and expenses during the reported period. There can be no assurance that
actual results will not differ from those estimates.

          (1)  Functional currency and treatment of foreign currency
               translation.

Due to the majority of the Company's operations being based in the United
Kingdom, the British Pound has been selected as the Company's functional
currency. In converting from the functional currency to the reporting currency,
assets and liabilities of the Company are translated into US dollars at the
exchange rate for the year. The resulting translation adjustments are recorded
within other comprehensive income.

Transactions in foreign currencies are recorded using the rate of exchange
ruling at the date of the transaction. Monetary assets and liabilities
denominated in foreign currencies are translated using the rate of exchange
ruling at the balance sheet and the gains or losses on translation are included
in the statement of operations.

          (2)  Research and development expenditure.

All research and development expenditures have been incurred internally and are
expensed to the statement of operations as incurred.


RECENT ACCOUNTING PRONOUNCEMENTS

In June 2002, the FASB issued Statements No 146, "Accounting for Costs
Associated with Exit or disposal Activities". The standard requires companies to
recognize costs associated with exit or disposal activities when they are
incurred rather than at the date of commitment to an exit or disposal plan.
Examples of costs covered by the standard include lease termination cost and
certain employee severance costs that are associated with a restructuring,
discontinued operation, plant closing, or other exit or disposal activity.
Previous accounting guidance provided by EITF Issue No 94-3, "Liability
Recognition for Certain Employee Termination Benefits and Others Costs to Exit
an Activity (including Certain Costs Incurred in a Restructuring)" is replaced
by this Statement. Statement 146 is to be applied prospectively to exit or
disposal activities initiated after December 31, 2002. The Company adopted this
Statement on January 1, 2003 and the adoption had no affect on the Company's
financial statements for the period ended June 30, 2003.

                                       20
<PAGE>
In April 2003, the FASB issued Statement No 149, "Amendment of Statement 133 on
Derivative Instruments and Hedging Activities". The Statement amends Statement
133 for decisions made by the Derivatives Implementation Group, in particular
the meaning of an initial net investment, the meaning of underlying and the
characteristics of a derivative that contains financing components. Presently,
the Company has no derivative financial instruments and, therefore, believes
that the adoption of the Statement will have no affect on its financial
statements.

In May 2003, the FASB issued Statement No 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity". The Statement
requires that the issuer classify certain instruments as liabilities, rather
than equity, or so-called mezzanine equity. Presently, the Company has no
financial instruments that come under the scope of the Statement and, therefore,
believe that the adoption of the new Statement will have no impact on its
financial statements.

FORWARD-LOOKING STATEMENTS

The foregoing management discussion and analysis contains forward-looking
statements and information that are based on the Company's management's beliefs,
as well as assumptions made by, and information currently available to the
Company's management. These forward-looking statements are based on many
assumptions and factors, and are subject to many conditions, including the
Company's continuing ability to obtain additional financing, and the ability to
service indebtedness as a result of the Company's operations. Except for the
historical information contained in this report, all forward-looking information
are estimates by the Company's management and are subject to various risks,
uncertainties and other factors that may be beyond the Company's control and may
cause results to differ from the Company's management's current expectations,
which may cause the Company's actual results, performance or achievements to be
materially different from future results, performance or achievements expressed
or implied by such forward-looking statements.

                                       21
<PAGE>
ITEM 3. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

The Company's management, with the participation of the Company's Chief
Executive Officer and Principal Financial Officer, has evaluated the
effectiveness of the Company's disclosure controls and procedures (as such term
is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the
end of the period covered by this report. Based on such evaluation, the
Company's Chief Executive Officer and Principal Financial Officer has concluded
that, as of the end of such period, the Company's disclosure controls and
procedures are effective in recording, processing, summarizing and reporting, on
a timely basis, information required to be disclosed by the Company in the
reports that it files or submits under the Exchange Act.

Internal Control Over Financial Reporting

There have not been any changes in the Company's internal control over financial
reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the
Exchange Act) during the fiscal quarter to which this report relates that have
materially affected, or are reasonably likely to materially affect, the
Company's internal control over financial reporting.

                                       22
<PAGE>
                           PART II. OTHER INFORMATION

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.

In July 2003, pursuant to a consulting agreement with POW! Entertainment LLC and
Stan Lee, the Company issued to POW warrants, in reliance on an exemption from
registration pursuant to Section 4(2) of the Securities Act of 1933, to purchase
750,000 shares of the Company's common stock, exercisable for five years at
$0.35 per share. Warrants to purchase 375,000 shares vested upon execution of
the consulting agreement, and the remaining warrants to purchase the remaining
375,000 shares are to vest after one year. After one year, POW has the right to
demand registration of the shares of common stock underlying the warrant at the
Company's expense.

In July 2003, pursuant to a consulting agreement with Jack Kuessous, the Company
issued to Kuessous warrants, in reliance on an exemption from registration
pursuant to Section 4(2) of the Securities Act of 1933, to purchase 240,000
shares of common stock, exercisable for three years at $1.20 per share. Kuessous
advanced $100,000 to the Company. The Company is negotiating with Kuessous the
terms of repayment of the advance through an issuance of shares of the Company's
common stock and an exchange of the warrants issued to Kuessous for warrants
exercisable at a different exercise price.

In April 2003, the Company entered into a securities purchase agreement, dated
April 22, 2003, for the sale of an aggregate of $785,000 principal amount of 12%
convertible debentures and warrants to purchase 1,570,000 shares of common stock
in reliance on an exemption from registration pursuant to Section 4(2) of the
Securities Act of 1933 to four accredited investors introduced to the Company by
The N.I.R. Group, LLC: AJW Partners, LLC, New Millennium Capital Partners II,
LLC, AJW Offshore, Ltd. (formerly known as AJW/New Millennium Offshore, Ltd.),
and AJW Qualified Partners, LLC (formerly known as Pegasus Capital Partners,
LLC). The debentures bear interest at 12%, and mature one year from the date of
issuance. The debenture holders have the right to convert the principal amount
of the debentures and the accrued interest into shares of common stock at the
lesser of $1 or 50% of the average of the three lowest intraday trading price of
the Company's common stock during the twenty trading days before the election of
conversion. The full principal amount of the convertible debentures are due upon
default under the terms of convertible debentures. In addition, the Company
granted the investors a security interest in substantially all of our assets and
intellectual property and registration rights. The warrants are exercisable for
five years at $0.31 per share. If the Company issues shares of common stock
below the market price, determined by averaging the last reported sale prices
for our shares of common stock for the five trading days immediately preceding
such issuance, the exercise price of the warrants is to be adjusted. The
exercise price shall be determined by multiplying the exercise price in effect
immediately prior to the dilutive issuance by a fraction. The numerator of the
fraction is equal to the sum of the number of shares outstanding immediately
prior to the offering plus the quotient of the amount of consideration received
by the Company in connection with the issuance divided by the market price in
effect immediately prior to the issuance. The denominator of such issuance shall
be equal to the number of shares outstanding after the dilutive issuance. In the
event that the Company breaches any representation or warranty regarding the
condition of the Company made in the Securities Purchase Agreement, or breaches
any covenant made in the agreement, the Company is to liable for liquidated
damages in shares or cash, at the election of the investors, equal to three
percent of the outstanding amount of the convertible debentures per month plus
accrued and unpaid interest.

On February 28, 2002, the Company had entered into a securities purchase
agreement with the same four investors who purchased securities pursuant to a
securities purchase agreement dated April 22, 2003 for the sale of $400,000 in
convertible debentures and warrants to buy 1,200,000 shares of the Company's
common stock. At closing, the Company issued $200,000 of convertible debentures
and warrants to buy 600,000 shares of the Company's common stock. Because the
Company did not complete the registration of the shares underlying such
debentures and warrants, the investors were not required to fund the additional
$200,000 for the purchase of convertible debentures and the Company did not
issue the additional 600,000 warrants. On March 14, 2003, pursuant to an
amendment to the securities purchase agreement, the investors funded $15,000 of
that subsequent investment and the Company issued $15,000 of convertible
debentures and warrants to purchase 45,000 shares of the Company's common stock.
On June 16, 2003, the terms of the convertible debentures and the warrants
issued on February 28, 2002 and March 14, 2003 were amended so that they are now
identical to the terms of the securities issued on April 22, 2003.

                                       23
<PAGE>
ITEM 5. OTHER INFORMATION.

In July 2003, the Company entered into a consulting agreement with POW!
Entertainment LLC and Stan Lee. Lee is the co-creator of comic book characters,
and POW is a production company formed by Lee. Under the agreement, the Company
engaged Lee as a creative consultant to provide to the Company advice on
creative ideas developed by the Company for establishing publishing and
entertainment intellectual property and to introduce writers, artists and
publishing houses to the Company to enable the Company to develop its projects
for publishing, film and television. As compensation, we issued to POW warrants
to purchase 750,000 shares of the Company's common stock, exercisable for five
years at $0.35 per share. Warrants to purchase 375,000 shares vested upon
execution of the consulting agreement, and the remaining warrants to purchase
the remaining 375,000 shares are to vest after one year. After one year, POW has
the right to demand registration of the shares of common stock underlying the
warrant at the Company's expense. The Company also agreed to reimburse Lee for
any and all reasonable out-of-pocket expenses incurred in fulfilling his role as
creative consultant. If the Company seeks to use Lee's services after an idea,
concept or project has gone into development, the Company is to pay POW
consulting fees for Lee's time at Lee's then current hourly consulting fee.
Additionally, if the Company seeks to use Lee's services after an idea, concept
or project has gone into production, the Company is to pay POW producer's fees
at Lee's then current producer's fee. The agreement is for a term of three
years, however, it may be earlier terminated by either party upon sixty (60)
days written notice.

In July 2003, the Company entered into a consulting agreement with Jack
Kuessous. Under the agreement, the Company engaged Kuessous to provide to the
Company marketing, sales and business development services and services for the
exploitation of products or licenses related to the garment and textiles
industry. Kuessous is to use his best efforts to keep the Company informed of
all corporate business opportunities that comes to his attention that may be
beneficial to the Company's business so that the Company can obtain the benefits
from his knowledge, experience, and personal contacts. The agreement is for a
term of one year. As consideration for entering into the agreement, the Company
issued to Kuessous warrants to purchase 240,000 shares of common stock,
exercisable for three years at $1.20 per share. The Company is not required to
pay Kuessous any other compensation under the agreement for services rendered.
Kuessous advanced $100,000 to the Company. The Company is negotiating with
Kuessous the terms of repayment of the advance through an issuance of shares of
the Company's common stock and an exchange of the warrants issued to Kuessous
for warrants exercisable at a different exercise price.

                                       24
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits.

The following exhibits are filed with this report:

Exhibit Number             Description of Exhibit

Exhibit 10.1*  Disclosure Schedules to Securities Purchase Agreement dated April
               22, 2003

Exhibit 10.2*  Consulting Agreement with POW! Entertainment and Stan Lee with
               Exhibits

Exhibit 10.3*  Consulting Agreement with Jack Kuessous with Form of Warrant

Exhibit 11*    Statement re: computation of per share earnings is hereby
               incorporated by reference to "Financial
               Statements" of Part I - Financial Information,
               Item 1 - Financial Statements, contained in this Form 10-QSB.
Exhibit 31*    Certification of Chief Executive Officer and Principal Financial
               Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-
               14(a)
Exhibit 32*    Certification Pursuant to Securities Exchange Act Rule 13a-14(b)
               and 18 U.S.C. Section 1350
_____
*  Filed herewith.


(b)      Reports on Form 8-K.

None.

                                       25
<PAGE>
                                   SIGNATURES

     In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                 PEAK ENTERTAINMENT HOLDINGS, INC.

Dated:  November 24, 2003        By:/s/ Wilfred Shorrocks
                                    ---------------------------
                                    Wilfred Shorrocks
                                    Chief Executive Officer and
                                    Principal Financial Officer

                                       26